How to hedge rising gasoline prices - so that even if gas prices go up you break even.

[JohnWxy]

Divide the number of miles you drive in a year by the average miles per gallon you get. That's the number of gallons you use in a year. Multiply that by the price you pay for a gallon of gas (about $2.17 a gallon on avg over the entire U.S.).

Now, that's the amount you should invest in an ETF that invests in oil or the only one I know of that bets on gasoline: UGA. for most people that would be range from about $900 to $1,400.

That way as the price of gas goes up you will be reap capital gains equal to what you pay extra for gas for transportation. The idea is to break even. That way even if the price of gas goes up you aren't hurt - well, at least as far as your personal expenses are concerned.


PowerShares DB Crude Oil Double Long ETF: DBX

[hobbit709]

1. If I'm lucky I have $20 at a whack to put gas in the tank.

With $900-1400 to spare, there are more important items on my list.

[Donnachaidh]

2. I'll bet that will work well for the unemployed and others getting GOUGED

by the rising rates, huh? Just jump on the bandwagon and get *your piece of the action* rather than do something to help everyone, like call your Congresscritter, etc.?

The great amurican way of doing things. :sarcasm:

[JohnWxy]

3. I am one who can be considered an activist for replacing gasoline as fast as possible. I have sent

numerous emails to Congressmen and others in support of technologies and policies that would reduce our dependence on oil and also reduce the oil inductry's ability to control prices. (Years before there was an internet, I was urging Congress to stop vertical consolidation of the big oil companies (where they control pricing from oil tanker to the retail pump) back in the mid 1980's. The ONLY member of Congress fighting Big Oil's push to change laws/regs to allow them to consolidate vertically was Ted Kennedy. Needless, to say we failed. Big Oil got what it wanted.

In 2008, Exxon-Mobil decided, however, to get out of the retail end of the business. The presence of ethanol in the market and the likelihood that biofuels were here to stay, has done serious damage to big oil's ability to control prices. IN 2008, although commodities speculators overwhelmed the market, driving prices far higher than normal supply and demand forces would have driven them, the fact that ethanol met 6.3% of the fuel demand kept gas prices from going even higher and took them down lower when the commodities speculators bailed in June - July of 2008.