Locking in the price of diesel

[George Burke]

Thats very interesting David. I want to go to Texas and back this coming spring, and then a fairly shorttrip to Ga. and Tn. later will be the extent of my travels. Does this co. also give you the price of propane. Just before gas prices went downI surveyed the Charlotte area propane market. It was $4.29, $4.19,$3.71, and U-haul wasat first $4.50, but after I kind of protested and mentioned $3.71, he said see the manager and you might get it for $2.99, but you have got to ask. Has anyone in the N.C., S.C., Ga., or Tn./Va. area filled up recently and have gotten a better price? Also is it common practice for folks like U-Haul to deal with their customers this way? Thanks, George Burke 1977 FC31 gasser

On Fri, Nov 28, 2008 at 7:57 PM, David Brady <"dmb993@earthlink.net"> wrote:

Folks,

The average price of diesel, country wide, is around $2.50
per gallon. We all know that in the long run, prices will go
up. I stumbled upon and ETF that allows you to lock in the
price of gasoline. The ETF is managed by a firm called

United States Commodity Funds LLC (I have no financial
interest). Although USCF doesn't have an ETF that tracks
diesel fuel prices, gasoline seems to be a reasonable
approximation. The gasoline ETF has a ticker symbol: UGA


Today's price for UGA is $23.96. Assuming I'll travel 10,000
miles next year, and I get 7 mpg, I'll need 1500 gallons. At
today's diesel prices I'll spend (1500 x 2.5) = $3750, so I
buy $3750 worth of UGA. As the price goes up at the pump,

I get the same percentage movement in UGA. After each
fill up, I call my broker and sell the same amount of UGA.
This way prices can fluctuate all they want but I'm guaranteed
to not spend more than $2.50 per gallon for my next 1500

gallons.

Of course, as with any futures contract, the price per gallon
may go down (not likely). In this case, I'll spend less at the
pump, but my UGA holding will decrease by the same percentage.
In this case I'll probably not sell UGA and simply hold it till

prices appreciate.

David Brady
'02 LXi, NC