New SBA Program Offers Gas and Diesel Price Protection: Small Businesses Can Lock In Costs for Up to 3 Years

The Helping Small Businesses THRIVE Act creates a pilot program within the Small Business Administration (SBA) designed to give small shops the same price-hedging powers usually reserved for massive corporations. By setting up a central 'commodity pool,' the SBA will allow eligible small businesses to enter into contracts that lock in the price of essential inputs like gasoline and diesel for periods ranging from 60 days to three years (Section 4). This means if you run a local delivery fleet or a landscaping business, you could potentially stabilize your fuel budget even if global oil prices go on a rollercoaster ride.

Locking in the Pump Price

Under this program, the SBA acts as a middleman in the complex world of futures and options. Instead of a small business owner having to learn the ropes of the Chicago Mercantile Exchange, they can sign an agreement with the SBA to buy a 'covered commodity' at a set price. The bill specifically mandates that gasoline and diesel be included from day one, with the option for the SBA to add three more commodities—like electricity or natural gas—within the first year (Section 4). For a bakery worried about the rising cost of natural gas for their ovens, or a trucking company buried by diesel surcharges, this offers a predictable ceiling on their most volatile expenses.

The Fine Print on Eligibility

This isn't a free-for-all; the bill sets specific boundaries on who can play. To keep the program focused on 'main street' rather than 'Wall Street,' Section 2 explicitly excludes financial institutions, investment advisors, and brokers. There is also a 'one-year' rule: your business must have been operating for at least 12 months before you can apply. This is a bit of a hurdle for brand-new startups that are often the most vulnerable to price shocks, though the bill does require the SBA to provide outreach and informational materials to these newer businesses to prepare them for future participation.

Costs and Risks for the Business

While the goal is stability, it isn't a subsidy. The bill requires the SBA to offer these agreements 'at cost,' meaning the business pays the actual market price plus any fees or commissions the SBA incurs (Section 4). Businesses are also on the hook for all initial costs upfront. One interesting feature is the 'call option' agreement, which acts like an insurance policy: you pay a fee to be protected if the price of a commodity jumps by more than 5 percent. It’s a way to cap your losses without necessarily committing to a massive bulk purchase.

Implementation and Oversight

The SBA has one year to get this off the ground, and they are prohibited from actually taking physical delivery of things like thousands of gallons of gas unless it's an extreme emergency (Section 3). Instead, they’ll handle the financial side through regulated markets. To make sure this doesn't become a bureaucratic black hole, the SBA must report back to Congress annually on how many businesses are participating and whether those businesses are actually seeing a benefit in their growth and expansion plans (Section 5). For the average taxpayer, the program is designed to be self-sustaining, using its own proceeds to cover operating costs, with any extra cash being sent back to the Treasury.