Fuel Pre-purchasing System for Price Volatility
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Solution Overview
Problem
Volatility and disparity in fuel prices affect consumer behavior and budgeting, as well as the ability of individuals and businesses to accurately plan for fuel expenditures due to changing production costs, markups, regulations, and government taxes.
Innovation Solution
A fuel pre-purchasing and sharing system that allows consumers to pre-purchase fuel at the lowest price available in their geographic area, enabling redemption at a later date regardless of current prices, and allows for sharing of pre-purchased fuel with others, thereby reducing the need for long-distance travel and providing budgeting stability.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Quantity of substance
If consumers drive large distances to service stations with cheaper fuel prices, then they can save money on fuel purchases, but the fuel spent driving to these service stations eats into and diminishes the savings realized
Solution Approach 1:
The system allows consumers to pre-purchase fuel at current low prices and store it for future use. This preliminary action enables consumers to lock in low prices now and use the pre-purchased fuel later, eliminating the need to travel long distances in the future when prices may be higher, thus avoiding the energy loss of travel while preserving fuel savings.
2Productivity
If retail fuel prices are determined by variable costs, markups, regulations, and taxes, then service stations can make profits and operate, but fuel prices become extremely volatile and disparity across regions increases
Solution Approach 1:
The system enables consumers to pre-purchase fuel at current prices, effectively locking in the price before volatility affects future purchases. This preliminary action stabilizes the effective price consumers pay, insulating them from future price increases while allowing service stations to continue operating with their variable cost structures and markups.
Solution Approach 2:
The system creates a virtual copy of the fuel purchase transaction that can be executed in the future at the originally locked-in price. This copying mechanism allows consumers to replicate the benefit of low current prices in future high-price scenarios, effectively decoupling future purchases from current market volatility.
3Productivity
If fuel prices are high, then service stations can achieve better profit margins, but consumers tend to drive less and buy vehicles with greater fuel economies
Solution Approach 1:
The system allows consumers to pre-purchase fuel when prices are low, creating a stored supply that can be used when prices rise. This preliminary action enables consumers to maintain normal driving habits and purchasing behavior even when prices are high, as they can redeem their pre-purchased fuel at the originally locked-in lower price.
4Quantity of substance
If consumers pre-purchase fuel and store it for future redemption, then they can lock in low prices and reduce travel costs, but the system requires infrastructure for tracking and managing pre-purchased fuel
Solution Approach 1:
The system uses virtual copies and digital representations of fuel purchases and storage. Instead of physically tracking and storing pre-purchased fuel, the system creates digital records that represent the pre-purchased fuel entitlements. This copying approach simplifies the infrastructure requirements while maintaining the core functionality of price locking and future redemption.
Data Source
AI summary
A fuel pre-purchasing and sharing system (and associated methods) is disclosed herein. The system allows consumers to pre-purchase fuel at a pre-purchased price, and redeem pre-purchased fuel at a subsequent time regardless of the current price of fuel posted at the point of re-fueling. The pre-purchased price can be based on current fuel prices of fuel at one or more service stations that are near to a consumer at the time that the fuel is pre-purchased. Pre-purchased fuel of one or more grades of fuel can be held in a pre-purchased fuel tank. The pre-purchased fuel tank can be shared with other consumers such that the other consumers can redeem pre-purchased fuel held in the pre-purchased fuel tank.