Is it possible to buy a lifetime supply of gasoline?

I noticed there are a lot of “when is the oil supply gonna run out” threads lately.

Supposing I calculated the total gasoline I would ever need, is it possible to purchase that much gasoline now and lock in at today’s prices? For me, I figure this will cost between $10,000 and $40,000 (really safe estimate).

I would be willing to pay a premium to do this. I am also willing to store a few gasoline drums or barrels in my garage, since it may be delivered to me this way. However, I’m not willing to store all of the actual gasoline (i.e. 20,000 gallons).

I don’t understand the oil futures market, but could that be used?

Or does a company exist today that sells you this, with a guarantee? How would such an enterprise work? Maybe they would buy up a large stock of crude oil, store it in some huge natural reservoir (refill an empty oil field inside the US, perhaps?) and slowly refine it for its customers?

I don’t know if you can do it personally, but I remember that part of what has made Southwest so successful is that they bought a ton of fuel when it was cheaper. I have no idea if they store it themselves or if they just had a deal with the oil company to buy x amount for y dollars, but now they have fuel at a much cheaper rate than many other airlines.

Even if you could buy it, you have to remember that gasoline is semi-perishable. By that I mean that without special stabilizers, it gets gummy and can foul up your car. Southwest got their deal buy buying gasoline futures, IIRC.

Just for the heck of it I ran some numbers to see how much gas I might need.

I figure I put about 15,000 miles on a vehicle a year and an average vehicle gets about 22 mpg. So that’s about 681 gallons per year. At around $1.90 a gallon it puts me at $1,293 a year.
I’m 35 and hope to keep driving till I’m at least 70.
That’s 35 years, 23,835 gallons of gas, for $45,255.

Problem 1 for me- I don’t have $45K lying around
Problem 2- Where am I going to store over 23,000 gallons of gas?

Problem 3 how are you going to get a permit that allows you store 23,000 gallons of gas…

You can buy goods and services for later delivery on the commodities market. I’m not sure how far out you can buy, or what minimum quantities are involved. This is normally purely a paper operation – you don’t actually take delivery of 10,000 pork bellies – however in theory this can happen.

Large customers can negotiate any sort of deal with suppliers – if you have the clout, you could do the same. What you need is a co-op. Get all your friends and neighbors together, plus their friends and neighbors, plus all theirs – you need lots of members to make it work. Then put in your own filling station, and work out a multi-year contract with an oil company. This type of arrangement is fairly common in rural areas.

You just buy a filling station with full storage tanks and padlock all the pumps.

You can view recent gasoline futures trading at NYMEX (New York Mercantile Exchange) here. They appear to trade up to 1 year in advance. Trading is in units of 1000 barrels (42,000 gallons) for delivery to New York harbor. Unless you sell your futures contract[sup][/sup] before the completion date, you will indeed need to arrange collection from the harbor terminal.
[sup]
[/sup] In fact you don’t sell your original futures contract, you enter into another contract in the other direction with a third party.

As noted above, fuel loses volatility and becomes “stale” over time. The 5 gallons I buy in the fall for the snowblower, if unused by spring gets dumped in my truck to burn rather than using it for the lawn mower. Fresher is gooder. :wink:

There’s also “Opportunity Cost” to consider. Opportunity cost is the money you lose by not investing in the next best option (or the way more money you lose by not investing in the best option)

If you take $45,00 and invest it at 4% for 35 years you end up with $177Kish, a profit of $132K. We’ll not consider taxes for this on account doing that shit makes my tummy hurt.

Assuming gas milage improves at 2% per year and gas prices go up at 4% per year you’ll end up spending some $64,300 for fuel over that time. The 4% investment makes you some $68K.

At 5% per year increase in gas you spend $77,400

At 6% it’s $93,900

At 7% it’s $114,700

At 8% it’s $140,800

At 9% it’s $174,000

So, unless you forsee gas prices going up by well over 10% per year for 35 years you should by a 30 treasury bond.

As an aside, back in the early 70’s during a very brief price war in Portsmouth, OH my father in law bought 5-600 gallons of gas for $.19. It didn’t work out so good. The tank leaked a bit, everyone in the extended family wanted to “borrow” some gas, and a couple flat out helped themselves. He probably ended up paying more.

What the others said. Gasoline (as things go) degrades substantially in the course of a year or so and needs to be used within a fairly narrow time window or it goes bad and can really foul up your car.

What on earth do you all drive over there? Surely you must get more mpg out of your vehicles than that?

SUV’s and big freaking trucks.

Nope. We drive big, fast cars & trucks, and we drive them inefficiently. We do lot’s of stop & go driving because everyone wants to race, and no-one will let anyone merge in front of them.

Plus, our communities – even the urban centers – are designed around the automobile. This means that it’s easier and safer to drive if you’re going more than 2 blocks. So we drive, and drive, and drive.

22 is actually pretty good. Many people get way less than that.

I know your gallons and ours differ, so I’ll give you the metric equivalent.
22 miles per US gallon equals 10.7L/100km. (That should be about 26.4 miles per UK gallon if my math is right). I have a 1991 Nissan Stanza with 137,000 miles, manual transmission, and that’s what I seem to average. Brand new, it should get 29miles/gallon highway, and 21 miles/gallon city.

I should have remembered about the difference in our gallon quantities.
As someone who normally drives medium sized saloons (eg. Golf/Escort) I am used to figures around 34/35 mpg. Also as a shift worker I can usually avoid the heaviest traffic.
Anyway I didn’t mean to hijack the thread so I apologise for that.

wow! Golf and Escort are considered subcompact models in the States. No, I’m not kidding. On the other hand, they’re considered full size here in Mexico, at least at the rental car places. Can you imagine paying $80 a day for one of these little things?

Years ago during the late 70s/early 80s oil crisis I read about a musician who had a 20,000 gallon underground tank at his home. I’m sure it was Peter Frampton but can find nothing to confirm it. I assume John Travolta must have a fuel source at his home since he parks his jet there.

IIRC it was John Denver.

Could be as I recall he flew ultralights…well sort of flew them.