Tuesday, June 12, 2007

Silly question - would you buy a year's supply of gasoline at these prices?

There is a gas station directly across the street from my place of work. Many of our employees do alot of driving, so the price of gasoline is a constant topic of conversation, and worry.

However, according to an analyst quoted in this Yahoo Finance article, gas prices have likely peaked for the summer. If we have a bad hurricane season, or if we go to war with Iran, prices could be adversely affected.

And across the street, regular unleaded is now at $2.77/gallon, down from $3.04/gallon a few weeks ago. Our Honda Odyssey (gas hog) cost $49 to fill up recently, so these lower prices are a welcome sight.

That got me thinking - if I had massive underground storage tanks under my house, ones that the neighborhood association either wouldn't know about or would somehow approve of, AND if coming up with the money was not an issue, would I buy a year's worth of gasoline at $2.77/gallon?

For some strange reason, I'm thinking I would. We had a light hurricane season last year, so we're probably due (I am not a meteorologist, nor did I stay at a Holiday Inn Express last night). Also, I am thinking that our war in Iraq is not going to get any better -- the Middle East seems farther and farther away from peace, and the Palestinians are attacking each other and about to start a civil war. Frankly, $2.77/gallon looks great to me right now.

How much is regular unleaded where you live, and if you had the chance to stock up on gas at today's prices, would you?


alex said...

No.... Darn it!!! I still remember the $1.00 a gallon prices 10 years ago. I'm holding out :)

Q said...

Oh man, those were good times. Why can't gas go down in price like electronics?

In Iran, they pay an average of 33 cents a gallon.

TMAC said...

$3.60 at the local BP (Alexandria, VA)

Killing me.

Anonymous said...

Gas doesn't last forever without adding stabilizer. The cost of the stabilizer would probably soak up your savings. Then there's the cost of owning the real estate for the tank, digging a huge hole, and EPA compliance.

But you probably weren't being literal. I think hording gasoline is probably akin to hording "forever" stamps, and equally as profitable.

The Invisible Spinster said...

What you're talking about, Q, is essentially a gas co-op and those things do exist in a few places. I envy the folks who plunked down thousands when gas was under $2.

But to answer your actual question, yes, I would probably buy in at $2.77. Common sense tells me that now the gas companies have figured out that price and demand are not even remotely related they will use every excuse imaginable to keep prices up.

I highly doubt we will ever see gas under $2 a gallon and I suspect that after another year or so we will never see it under $3 a gallon. :(

plonkee said...

If it was ever $2.77 a gallon over here, there would be queues in the street. I think it works out to about $7 a gallon at the moment.

KMull said...

A resounding HECK YEA I would. Even if it doesn't go up for another 9 months, it will start going up.

Store it for 10 years and sell it for $5/gallon

Q said...

Poor Plonkee, Geez Louise that's alot of money! $7/gallon??? I might actually start walking!

Pbanker said...

I've noticed that gas prices spike when oil prices spike, but they don't come down anywhere as quickly when oil prices drop.

by the way, would you be interested in a link exchange? :)

Jon said...

How about buying gas futures as a hedge against the price increase? I don't really know how futures work, though -- it's one of the many many investment choices I want to investigate.