Tue, May 18, 2004
ExxonMobil, meet AmeriTrade
Gas prices in Southern California (all right, Los Angeles – like the rest of it matters!) are cresting around $2.60 this week for a gallon of the premium stuff, which is the stuff I buy because my Volvo manual told me so, and let's not get into why I'm whipped by my Volvo manual because that isn't the point.
Nor is the point "wah, the oil industry this" or "wah, the Bush administration that" although valid points are both of these. I'm actually with the freaky-loony left-wing enviro-zealots on this one. Gas prices in America should be as high as they are in Europe – or higher – because it would increase the incentive for people to buy fuel efficient cars or increase the pressure on the automotive industry to make cars more fuel efficient or make hydrogen sound more interesting. Hell, I'd be happy if it encouraged people to forgo cars altogether and just get piggyback rides from Ed Begley, Jr.
But, as I drove past gas stations that had clearly been forced to go out and buy extra twos for their signs as a result of the Iraq war, I was thinking about the issue. Because with gas prices fluctuating so wildly, it creates one of those situations. A situation in which people are having to try to predict when is a smart time to buy gas – is the price going up or going down, should I wait until tomorrow and see if it's lower, should I buy today in case it goes higher? And it made me realize – the only other thing that fluctuates so rapidly in price is: the stock market. And thus, my brilliant idea of the day. (BID) (tm)
Let's buy gas like we buy stock.
Eh? You with me? Come on!
Here's how it works. You adopt all the good things from the stock market: buying on margin, options, limit orders, etc. This way, if gas is $1.59 a gallon, I can buy options for 1,000 gallons at that price, even though I can't fit 1,000 gallons into my car (I don't have an H2). Then, I cash in those options when I need gas, and even if the current price is $2.60, I still get mine at $1.59. This works just like stock options: the price can go up, which is to your advantage, or down, which is to the gas companies' advantage. (And it can too go down, just ask the dot-commers. One of them is probably squeegeeing your windshield right now.) Or you could buy gallons on margin, which as I understand it, means buying with credit on the assumption that you'll profit from the later sale and thereby pay off your debt with those profits. This would basically be good for crazy get-rich-quick speculative investors (and, of course, the gas companies) and so it would be a good incentive to switch to this system. Also a good incentive would be that the price of gas could fluctuate even more wildly and with greater frequency. Some people would still be buying gas at the "current" price (whatever the price happened to be at the moment they started pumping – although it would be amusing if the price were set for each individual gallon as it were being pumped, "that'll be $24.71 – $2.18 for the first gallon, $1.79 for the second, $3.80 for the third,...") and the gas companies would love them, because they'd be subsidizing all the people who were getting cheap gas by cashing in options. Everyone would be paying different prices for gas (just like the airline industry – and don't get me started on those miserable cocksuckers), which is good for the oil industry and good for the consumer because some people are getting deals and some people are paying more.
And it would be great for me because I could get deals by purchasing in volume (with options) or I could just execute limit orders over the Internet, specifying the maximum I'd like to pay and the number of gallons I'd like, and if the price dips below my maximum that day, I'd get my gallons and drive to a station to pick them up. Eliminating the need to shuttle around town, knuckles white on the steering wheel as that "empty" light stares at me, checking prices at every station in hopes of finding someone selling premium for $2.53 and thereby saving myself a whopping $1.26 on a full tank of gas.
© onebee · all rights reserved
LilSis — Thu, 5/20/04 12:43pm
"Gas prices in America should be as high as they are in Europe – or higher – because it would increase the incentive for people to buy fuel efficient cars or increase the pressure on the automotive industry to make cars more fuel efficient or make hydrogen sound more interesting."
The thing that drives me nuts is that you know the automobile companies have all the technology they need to make fuel efficient cars but they are going to just sit on it until they have some incentive to actually make the cars available to consumers (ie consumers would actually buy them because gas prices are so high). But of course, more than incentive, they would have to stop being influenced by super rich oil companies who are really controlling everything.