Can Fuel Up and Pay Later Help Curb Soaring Gas Prices? (2023)

This past weekend, gas prices reached over $5 per gallon, making fueling up even more expensive. Gas prices have skyrocketed across the country ever sinceRussia's invasion of Ukraineearlier this year. While gas credit cards can help you earn rewards to earn back some of the extra money you're spending on fuel, high credit card interest rates can be less than appealing. Fuel now, pay later options can also help ease the initial sticker shock by letting you pay less up front -- but it won't decrease your overall gas bill.

Fuel now, pay later refers to buy now, pay later, or BNPL, apps that let you purchase gas now and pay your balance back in installments. While gassing up now and paying down the line may sound attractive, there are risks to consider. For instance, even though these options may help you better afford to fuel up while waiting on your next paycheck, you could incur fees if you're unable to pay on time.

Here's what you need to know about fuel now, pay later apps to decide if they're right for you.

What are buy now, pay later apps for gas?

Every BNPL app works differently, but all services split your bill into small micro loans that you'll repay in installments. Some BNPL apps split payments into four installment loans that you repay every two weeks. Others may break up installments across months or even years. Some require payment up front, while others don't. Some even charge interest and other fees.

Currently there are two BNPL options available to pay for gas: Klarna and Zip, both which have partnerships with Texaco and Chevron gas stations.

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The Klarna app allows you to divide costs into four interest-free payments, paid every two weeks, with the first installment due up front. This means if you fuel up and your total comes to $80, you pay $20 right away and repay the remaining $60 balance in $20 installments over the next six weeks.

Klarna does charge a $7 late fee if you miss an installment, capping late fees at 25% of the order amount. It requires a minimum purchase of $10 and avoids the classic pitfall of BNPL debt accumulation by preventing you from taking on a new Klarna loan if you miss a payment. When you sign up, Klarna will perform a soft credit check, whichdoesn't impact your credit score. Klarna also won't help boost your credit -- the BNPL service does not currently report data to credit bureaus.

To use Klarna, firstdownload the appand create your account. Then, using the "Pay In-store" search, select Chevron or Texaco. Follow the instructions to create a digital card: Texaco and Chevron will prompt you to add a minimum amount to the virtual card. If your total fuel cost is above that number, you can adjust the number to add more funds, and if it's below, unused funds will be automatically restored to your balance. Add the virtual card to your digital wallet and hold your phone to the pump or station reader to pay your first installment.

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Zip (formerly QuadPay) is a BNPL app that also divides your bill into four interest-free payments, over six weeks, with the first installment paid up front. Unlike Klarna, Zip charges transaction fees of $4 per purchase ($1 per payment) and requires a minimum purchase of $35. Zip also will charge a late fee of either $5, $7 or $10, depending on your state, for a late installment.

Like Klarna, Zip only runs a soft credit check when you sign up, and does not report account and transaction behavior to credit bureaus. Zip also includes a fail-safe against debt accumulation: If you stop making payments on a current Zip installment plan, you won't be able to use the platform for a new loan until your balance is paid.

To use Zip, download the app and create your account. Then, using the In Store tab, select Chevron or Texaco. Enter your total purchase amount and request enough funds from your available balance to cover the cost plus taxes. Once you click Continue, your estimated installment amounts and payment due dates will be displayed. Review your installment payment plan and click Continue to create a Zip digital card. Add the virtual card to your digital wallet and hold your phone to the pump or station reader to complete your order.

See at Zip

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Are fuel now, pay later apps risky?

While using a BNPL option at the pump may sound enticing, customers should be wary of their lack of regulation and credit reporting, said Yaacov Martin, CEO of Jifiti, a multilender platform that connects retailers to buy now, pay later options.

The current lack of regulation of BNPL apps can make it easier to establish overspending habits, borrow carelessly and avoid repayment. In fact, a March 2022 survey from PYMNTS and PayPal found that 78% of participants polled would be inclined to use BNPL services to fund a large purchase they would otherwise not have the funds to buy. Since buy now, pay later services are easier to qualify for than credit cards, you could find yourself stretching your budget too far if you use them frequently.

And, whenever you use BNPL methods to pay for a service or consumable product, such as gas, you may be at a higher risk of missing payments. "It's easier psychologically to pay for a couch that you can see and touch versus a consumable like gas," said Martin. "Gas gets consumed in its entirety before you finish repaying without even a picture or memory of it remaining like with a vacation."

Is it better to use a credit card or BNPL service at the pump?

Right now, where you can use BNPL apps to pay for gas is limited. Chevron and Texaco stations are the only gas stations offering these services, so if it's not feasible for you to fuel up at those locations, they're not a great choice. However, if you are fueling up at Chevron or Texaco, here's how to decide which payment method might work better for you.

Credit cards may offer rewards every time you fuel up. Gas station branded credit cards offer an average discount of 5 to 10 cents a gallon. For example, the Chevron® and Texaco® Techron Advantage credit cards allow you to earn 3 cents a gallon on regular or diesel fuel. But credit cards also require a hard credit check -- which can impact your credit score -- in order to get approved

Here's the main difference: If you don't have enough money to pay back your full card balance by your monthly due date, your balance will begin accruing interest -- and the numbers are no joke. The average credit card APR is 16.34%, while the average APR for gas cards lies at a whopping 25.8% -- and the Techron card has an APR of 29.99%.(PDF)

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In contrast, Zip and Klarna are both interest-free, have a slightly longer repayment period of six weeks and currently do not impact your credit score. Both, however, do charge late fees (and Zip charges a processing fee). Ultimately, if you're deciding between fueling up with a credit card or BNPL option, it's important to keep interest charges, late fees and your budget -- and when you can repay your balance -- in mind.

Given sky-high gas prices, should you take advantage of Klarna and Zip's partnership with Texaco and Chevron? Though buy now, pay later apps may make sense as a last resort for cash-strapped drivers as inflation rises, they could also lead to overspending and late fees. If you do opt for BNPL at the pump, practice healthy borrowing habits, like making sure you can repay the balance in full and on time. We recommend using these apps for gas only when necessary to avoid becoming dependent on them.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.


What can be done to reduce gas prices? ›

The most effective solutions are long-term projects, including increasing housing density, building “complete streets,” improving public transport systems and electrifying vehicle fleets.

Who controls our gas prices? ›

Yes, policies and legislation can certainly play a role, but gas prices are largely dictated by oil prices, and oil prices are dependent upon supply and demand. Presidential control is not as simple as what those posts suggest on social media. The year 2022 is a perfect example.

What is causing gas prices to rise? ›

Tight supply and increased demand as more drivers fuel up are the main culprits.

Can the government control gas prices? ›

Drivers suffering from price whiplash might be asking "Who controls gas prices?" The short answer is... No single person, company or government can really be said to set gas prices.

Who makes money when gas prices are high? ›

Shale producers

Shale oil producers are particularly well-suited to benefit from high gas prices given the relatively quick turnaround for extracting this type of oil. Shale is a type of rock that can be found Colorado, Utah, Wyoming and other states that contains oil and gas.

How much profit does an oil company make on a gallon of gas? ›

The oil and gas industry has an average profit margin of 4.7%. This means that about 4.7% of the money the industry brings in is considered profit and doesn't go toward paying for the company's costs.

How much profit on a gallon of gas? ›

Gas retailers receive a fraction of the price listed on the sign–their net profit per gallon is around $0.03-$0.07–after factoring in costs like labor, utilities, insurance, and credit card transaction fees. This puts the net profit margin of a gas station at less than two percent.

Why are gas prices so high in the US? ›

Why Are Gas Prices Still High? High demand for crude oil and low supply pushed gas prices upward this year.

What can be done to solve the problem of rising petrol prices? ›

Investment in alternatives to the country's current reliance on fuel:
  • improvement of Transnet to alleviate reliance on road freight;
  • provision of safe, reliable, sustainable, affordable public transport; and.
  • provision of safe roads for non-motorised transport.
Apr 14, 2021

What factors force high gas prices to drop? ›

Factors That Force High Gas Prices To Drop

Gas prices usually drop when supply increases. There are a lot of ways that could happen; for example, OPEC could decide to release more oil, or shale oil producers could find another large deposit or adopt new technology.

Will gas prices go down in 2023? ›

The yearly national average price of gas in 2023 is forecast to drop nearly 50 cents per gallon from that of 2022 to $3.49, according to GasBuddy's 2023 Fuel Outlook.

What actually affects gas prices? ›

Crude oil prices are a major component of the price that we pay for gasoline (or diesel) at the pump, as shown below. Other factors include the cost of refining crude oil into gasoline; the distribution and marketing of gasoline; and federal, state, and local taxes on gasoline.

Why are gas prices so high 2022 us? ›

Why were gas prices so high in 2022? Gasoline and oil prices began to rise in 2022 after Russia invaded Ukraine in February. Prices were driven up by U.S. and European Union sanctions hampering Russia's ability to sell crude oil.

Can oil companies control gas prices? ›

Since only 1 percent of service stations in the U.S. are owned by companies that also produce oil, U.S. oil producers are in no position to control retail gasoline prices.

Who controls the price of oil today? ›

The price of oil is set in the global marketplace. Oil is traded globally and can move from one market to another easily by ship, pipeline, or barge. As a result, the supply/demand balance determines the price for crude oil around the world.

How much will stimulus checks be for gas? ›

The Gas Rebate Act of 2022 is legislation that would give a $100 monthly rebate (and $100 for each dependent) to help Americans pay for high gas prices. The idea is that payments would continue throughout 2022 during any month when the national average gas price is $4 or more (like right now).

Do oil companies make more money when gas prices are high? ›

Social media posts shout the news: “Major oil companies are making record profits because of gas prices.” Yes, it's true that major oil companies had high net income last year, in some cases the highest in eight years. But it's because of oil prices, not gas prices. Exxon Mobil Corp.

Where does most money that is paid for gas go? ›

When you buy gas — or at least when you bought gas in April — 60 percent of your money goes toward crude oil, the U.S. Energy Information Administration (EIA) says. The rest goes toward refining (17 percent), distribution and marketing (11 percent), and state and federal taxes (12 percent).

Who is profiting from energy prices? ›

The BIG money is made by the oil and gas producers (some of whom are the same firms).

Do gas station owners make money off gas? ›

Retailers Make Very Little Selling Gas

Generally, the markup (or “margin”) on a gallon of gas is about 15 cents per gallon (gross profit before expenses). Factoring in expenses, which include rent, utilities, freight, labor and credit card fees, a retailer is left with about 2 cents per gallon in profit.

Do gas station owners make money? ›

Gas station owners' income varies depending on several factors, including the location of the gas station, prices of fuel, and sales of non-gas-related products. Throughout the US, the owner's average salary ranges from $40,000 to $100,000 per year.

How much does it cost to make 1 gallon of gasoline? ›

How much does it cost to refine gasoline? The cost to refine gasoline varies between 40 cents and 70 cents per gallon, depending on various factors.

Who sets the price of oil in the United States? ›

Five Fast Facts About U.S. Gasoline Prices. Petroleum prices are determined by market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.

How many gallons of gas can you get from one barrel of oil? ›

Petroleum refineries in the United States produce about 19 to 20 gallons of motor gasoline and 11 to 12 gallons of ultra-low sulfur distillate fuel oil (most of which is sold as diesel fuel and in several states as heating oil) from one 42-gallon barrel of crude oil.

How much electricity can 1 gallon of gas produce? ›

The ratings are based on EPA's formula, in which 33.7 kilowatt hours of electricity is equivalent to one gallon of gasoline (giving a heating value of 115,010 BTU/US gal), and the energy consumption of each vehicle during EPA's five standard drive cycle tests simulating varying driving conditions.

Is the US the only country with high gas prices? ›

Hong Kong holds the dubious honor of having the world's most expensive gas at the moment. The fact that consumers in other countries are paying even more doesn't erase the financial pain Americans feel as they attempt to balance their budgets, of course.

Why are oil companies not drilling? ›

The reason that U.S. oil companies haven't increased production is simple: They decided to use their billions in profits to pay dividends to their CEOs and wealthy shareholders and simply haven't chosen to invest in new oil production.

Will gas prices go up in 2023? ›

Highlights from GasBuddy's 2023 Fuel Outlook:

Though most major U.S. cities will see prices top around $4 per gallon, areas of California like San Francisco and Los Angeles could again experience near $7 gas prices again in the summer of 2023 if refineries struggle under mandates of unique formulations of gasoline.

Does OPEC control gas prices in the US? ›

OPEC doesn't set the price of oil. But any economics professor will tell you, supply and demand determines price. OPEC is the supply side of that equation. Along with 11 other countries in "OPEC plus." That includes Mexico, Malaysia and Russia.

Who controls gas in the US? ›

The Federal Energy Regulatory Commission (FERC) is the primary body that regulates oil and gas companies, although a number of other federal offices oversee specific components of the oil and gas industry.

What actually determines gas prices? ›

The retail price of gasoline includes four main components:
  • The cost of crude oil.
  • Refining costs and profits.
  • Distribution and marketing costs and profits.
  • Taxes.

Why isn t the US pumping more oil? ›

The reason that U.S. oil companies haven't increased production is simple: They decided to use their billions in profits to pay dividends to their CEOs and wealthy shareholders and simply haven't chosen to invest in new oil production.

Does the US government control oil prices? ›

Today, U.S. oil, gas, and coal markets are generally free from price controls and trade restrictions, but Congress still manipulates the energy industry by tax preferences, spending subsidies, and environmental regulations.

Will we run out of gas in the US? ›

Assuming the same annual rate of U.S. dry natural gas production in 2020 of about 30 Tcf, the United States has enough dry natural gas to last about 98 years. The actual number of years the TRR will last depends on the actual amount of dry natural gas produced and on changes in natural gas TRR in future years.

Can America use its own gas? ›

But that statement, while true in some ways, covers up several decades of short-sighted energy policies. The U.S does indeed produce enough oil to meet its own needs.

How many years of gas is left in the US? ›

Gas Reserves in the United States

The United States has proven reserves equivalent to 11.9 times its annual consumption. This means it has about 12 years of gas left (at current consumption levels and excluding unproven reserves).

Do oil companies manipulate gas prices? ›

In other words, the price of oil is not controlled directly by anyone, but oil companies and cartels still have the power to manipulate it and extend trends tied to outside economic and political effects out to their benefit.

How much would gas be if oil is $200 a barrel? ›

Analysts cited by NPR project that if oil hits $200, the retail price of gas would average $5.84 in the US.


1. Analysis: Is Biden to blame for rising gas prices?
2. Gas prices soar in Europe after Russia cuts off Nord Stream supplies | DW Business
(DW News)
3. Will the gas price cap reduce security of supply? | DW News
(DW News)
4. As price of natural gas surges, so do household energy bills
(PBS NewsHour)
5. Why Russia’s War Drove Up U.S. Gas Prices
6. President Biden calls out U.S. oil companies as gas prices soar
(CBS News)


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