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Agland's Mr. Max Propane Contract
Agland's "Mr. Max" contracting program was developed
as a means of price protection for propane users.
Simply stated, the "Mr. Max" contract locks in a "ceiling"
price for your propane needs, while giving you
full "downside" protection in a declining market. Agland
will invoice either the "Mr. Max" price or the daily delivered
price, whichever is less, for the gallons delivered. All contracts
will require a $0.10 per gallon administrative fee for the total
Participation in the program is open to anyone using propane. To participate you will need
to 1.) estimate the gallons you will need October 1st to March 31st,
2.) pay a $0.10 per gallon administration fee on the estimated gallons
which may be billed to your 30-day
convenience credit account, if established, 3.) sign and return
a Mr. Max contract to the Petroleum Division.
Frequently Asked Questions
Q: Do I have to pay for all contracted
gallons before delivery?
A: No! You pay only the $0.10 per gallon
administration fee at the time the contract is accepted. Customers
with a 30-day convenience account will be invoiced at the time of
delivery or if you don't have an established credit account you
will be billed for cash upon delivery.
Q: What happens if I take delivery
of more gallons than was contracted for during the quarter?
A: Daily Agland posted price will be
charged for all gallons that exceed your contracted quantity.
Q: What happens if I don't use all
of the contracted gallons before March 31st?
A: Remaining gallons simply go away
and the administration fee on those gallons will be forfeited.
Q: What is the "Mr. Max"
contract price measured against?
A: The contract price is measured against
the daily delivered posted price. The customer will be billed for
whichever is less.
Q: Why is an administration fee required?
A: A vital component of the "Mr.
Max" contract is the use of "Put" options. Agland
must purchase options along with the physical product (gasoline,
diesel fuel, or propane) in order to offer downside protection to
the customer. Extreme market volitility has driven the cost of these
options up nearly 300% from last year. This dramatic increase is
the reason for passing on some of the cost in the form of a $0.10
per gallon administration fee.
The Mr. Max contracting program is WIN-WIN for the end user. Other
programs that greatly enhance the Mr. Max contracting program are
the Budget Billing and Scheduled Delivery
For more information about our Mr. Max or Budget Billing programs,
contact the Petroleum Division directly.