First and foremost, though the topic says as Energy, it is targetted only towards crude oil and its extracts(read as Petrol, Diesel) which are used extensively for personal use. It works in the concept of hedging and my thought that price of fuels should be based on “The effect they have on environment and a person should be rewarded for the savings he is doing to save fuel” . The main purpose of this is to make people delay their fuel purchase, giving returns for fuel they do not buy and also give captive amount for research in alternate energy area.
It works in this manner. Assume that a person deposits RS 10,000 or USD 1000 to their fuel supplier(IOC,HP, BP,Shell) etc. As and when he purchases, the amount will be deducted from the amount he has deposited. For a fixed term, he will get fuel at par market rates. After a period, he will be given fuel at a rate discounted from the market rate.
For e.g if a person deposits Rs 10000. For next 6 months, he will purchasing fuel at market rate. From the 7th month, he will be getting discount of Rs 3 per litre. After an year, he will get fuel at discount of Rs 6 per litre and after 18 months it will be discount of Rs 10 per litre. Assume that the lock in period is 3 years, at the end of 3rd year, he will be getting returns based on the current rate of fuel. While making deposit of 10,000 if a litre of fuel is 50, he will be allotted 200 litres. If the amount is unused, at the end of 3 years he will be getting market rate of 20 litres of fuel.
How this will help companies
1. They get money to invest in research.
2.They get money which can be deposited in banks and can gain interest.
3. At returning the money later at market rate, they dont lose any thing.
How this will help People
1. Help them to postpone fuel purchase, as they get savings when they purchase fuel later.
2. In the period of saving, they will use public transport etc.
3. Oil will become a mode of investment.
The success of it depends on how effectively we can track purchases by a user. How will we track when user deposits in 2 suppliers and purchases from another supplier?
Also i beleive oil companies will not become crude capitalists and act against favour of consumers by manipulating the rates to their will.
Though it needs lot of drill down to details, work on the numbers to make it a proper fool proof plan, at an idea level i think it provides a potential. Let me know your thoughts.