If you could fill up a gas cash card for $3.00 a gallon, how much would buy?

Discussion in 'Gen 2 Prius Main Forum' started by burritos, May 29, 2008.

  1. burritos

    burritos Senior Member

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    Hypothetically, if you had a ONE time chance to fill up a gas cash card with as much gas credit that you could afford at $3.00 a gallon, how much would you pony up? Would you spend your entire savings on the card? Or would you just fill the gas cash card only a couple of hundred bucks?

    Note, you can't lose the card. If you lose it, you can get a replacement card with the same last balance. No one else can use the card. Nor can you sell the card or the gas. Also, the gas can only be used for a vehicle that you drive. If someone else uses the vehicle for any significant amount(ie. more than 5 miles a day)an imaginary computer will deduct that gas credit differential from your card.

    Please don't try to subvert the rules.
     
  2. ForTheGlory

    ForTheGlory New Member

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    Enough for about 10 years of gas, whatever that comes out to be given my average miles per year.

    Any more than that and I'd be worried that some future technology would cause gas to be much less useful.
     
  3. tasker109

    tasker109 New Member

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    as i said in one of my other posts, a department store in our area was selling gas cards buy one get one half off. we bought all they would let us, $1,000 worth of cards for $750. would have bought more but they sold out and didnt repeat the offer. the bad thing about those cards were they were for e-10 stations so we really saved little but i guess it was better than paying full price. if given an oppurtunity to buy 3.00 gas (as long as it wasnt e-10) i would tap our savings and buy at least 5k worth. you know you are going to use it, so why not??
     
  4. burritos

    burritos Senior Member

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    Because gas might go below $3.00 a gallon some day. AHAHAHAHAHAHAHAHA. Just kidding.
     
  5. Sheepdog

    Sheepdog C'Mere Sheepie!

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    be my luck I'd buy a load of it and the next day aliens would give us free energy for our cars forever. Who am I kidding? I dont usually have enough extra money to buy dinner much less truck loads of gas!
     
  6. pewd

    pewd Clarinet Dude

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    as much as i could afford ; i could immediately flip them on ebay for a tidy profit.

    for personal use, oh, 15,000 gallons? which would hold me for , hm, 25 years? thats about right at my age. (i'm officially 1/2 an antique!)

    so the question really boils down to, do we think gas will ever drop below $3.00 again? maybe, but i think long term we'll be averaging way above that.
     
  7. penbed

    penbed New Member

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    Re: If you coul should fill up a gas cash card for $3.00 a gallon, how much would buy?

    Easy,4000 gallons for me.
    I am 61,average 15000 miles a year.
    4,000 gallons for my Prius and years of driving should leave
    some left over.
    Guess it is time to redo my will,who gets the gas card?
     
  8. burritos

    burritos Senior Member

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    No. You can't sell it. Nor can you give it away.
     
  9. TonyPSchaefer

    TonyPSchaefer Your Friendly Moderator
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    $6,000

    12,000 miles per year on average
    60 MPG on average
    200 gallons per year on average
    $600 worth of $3.00 gas
    Ten year's supply: $6,000

    Of course, after a couple years, the 2010 Prius will give me more than 60 MPG so that card will last me longer than ten years. On the other hand, my wife will tap into it so it wouldn't even last ten years. I suppose I would round it up to an even $10k.
     
  10. chogan2

    chogan2 Senior Member

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    What a cool question. But you should have asked at $4, imho. So, my interpretation of the rules is: if you could costlessly store gas for your personal use only, now, with no storage cost and no degradation, how many gallons would you hoard?

    No question, at that price, I definitely would like to lock in my lifetime expected gas use and maybe a bit more. Definitely more if you'd allow it. That's not just due to my view of the oil/gasoline market, but also my view of the likely path of the value of the dollar.

    So I'm in the same camp as penbed above.

    After consulting the actuarial tables, I'd buy ... hmmm ... 10,000 gallons, please. Only because I'm 49, not 61.

    As an addendum, if you all are interested in the practical details of actual gasoline storage, then see some references below. Yes, I am a paranoid nut, but at least I'm a well-informed paranoid nut, consistent with my posts on food storage on this board. It used to be that the conventional wisdom was that you couldn't store gasoline - it would "go bad", whatevertheheck that meant. Not so any more. See the URLs below. Apparently, an airtight jerrycan and some stabilizer can give you a decade's worth of fuel storage.

    Peak Oil News Forums >> Post 600295 >> Re: long term gasoline storage

    Gasoline Shelf Life
     
  11. F8L

    F8L Protecting Habitat & AG Lands

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    Is it bending the rules to say I would opt to not put any amount of money on the card because I will not be using fossil fuel directly (and hopefully not indirectly) for personal transportation for very long.

    If I am forced to put some money into this card then I would say $6,000. That would buy me enough fuel to drive 20,000 miles a year for 5 years at which point I will be finished with school and have a decent enough job to purchase a non-fossil fuel dependant car like the Aptera AND there will be some nice vehicles out in the next 5yrs for me to choose from. :)
     
  12. fthorn

    fthorn From gas hog to greenie to gas hog

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    I figure $30,000 should do me for my mortal life.
     
  13. burritos

    burritos Senior Member

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    Since you can buy almost everything in advance if you pay for it up front and in volume, I wonder why this scheme hasn't been marketed?
     
  14. MT-IL

    MT-IL New Member

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    Do I have to burn it in a vehicle, or can I put it in containers out on the front porch and let it evaporate?
     
  15. chogan2

    chogan2 Senior Member

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    Seriously? I think a combination of high risk premium and adverse selection would make this unprofitable. Mostly the adverse selection.

    The seller would bear a lot of risk. Publicly traded gasoline futures don't extend beyond a year, I think. And the seller could not take physical delivery and physically store gasoline as a hedge, it's pretty much used as it is produced. So the seller would necessarily be at risk for a lifetime's worth of gas price fluctuations, and would have to charge accordingly to have some expectation of making a profit.

    But I don't think that's the killer as such. The killer is that the buyer would select when to pay cash versus use the card. Buy cash when the price is low, only use the card when the price is high. No sense using up your $3/gallon card when it's $2.50 at the pump.

    Once that occurs, it's like adverse selection in health insurance, and the market falls apart. If you're only going to buy gas when the cash price is above the card price, then ... the seller has to charge a higher price to anticipate breaking even ... so you only buy gas on the card when it's really, really expensive ... (iterate) ... and there's no price you could charge for the card and break even on it. Whatever you charge for the card (within the range of possible future prices) if the purchaser is only going to use it to his advantage (and the seller can't hedge the risk and so pays the pump price at time of purchase), then you can never break even on it.

    (In health insurance, the analogous situation is an insurer that gets a bunch of people in poor health, has to raise rates, drives off the healthiest of the enrollees ... (iterate) ... and ends up going out of business. Also called the health insurance premium death spiral.)
     
  16. tasker109

    tasker109 New Member

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    actually somebody did think of it. i saw it on tv the other day. this guy was checking out at the counter and saying he wished he had pre-bought more gas. ill have to google it and see what i can find.
     
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