Submitted by EnergyTechStocks.com

Chrysler Corp. plans to offer most of its car buyers a special credit card which, when used to buy gasoline, will guarantee that they pay no more than $2.99 a gallon for three years, with the automaker picking up the difference. It’s an enticing offer, and by next summer it may well have been copied by other automakers and, quite possibly, all kinds of other retailers desperate to drive sales during hard economic times. If many millions of Americans start carrying discount gas credit cards, the already rapid rise in U.S. pump prices will accelerate, exposing America to $5 to $6 gallon in 2009, and, paradoxically, possibly causing sales of gas-guzzling SUVs to rebound.

It won’t take long for consumers to figure out – if they haven’t already – that gasoline costs a lot more in the spring and summer. Thus they will wait until next spring and summer to use their credit cards. This will undercut the price signals the market has been sending this spring (in the form of $3.50 to $4 a gallon pump prices) that appear to be succeeding in starting to force Americans to change their driving behavior. Demand will rebound. Pump prices will have to rise even higher than they would have, because fewer drivers will bear the burden of the growing global imbalance between oil demand and supply. (See: New Report from Raymond James: No Chance Oil Supply Will Grow Faster Than Demand; More Crude Price Rises Loom.) As refineries strain more than ever before, chances of equipment failure will be greater. Hurricane risks will be more pronounced. Pump prices could hit $5 a gallon in much of the U.S. by Memorial Day (May 25) 2009.

As if this wasn’t bad enough, widespread use of discount credit cards could really undermine efforts to increase vehicle fuel efficiency. Today’s EnergyTechStocks.com’s “Investor Alert” is about how the Chinese are buying gas-guzzling SUVs and luxury cars because their government caps the amount drivers must pay at $2.90 a gallon. China’s state oil companies must pay the rest out of their drilling profits. (See www.msnbc.msn.com.) So even when pump prices are hitting $5 a gallon, Americans shielded from the “posted” pump price may continue buying gas-guzzlers. It should be noted that Chrysler’s front man on this announcement is Jim Press, recently of Toyota. One suspects that Press is keenly aware that Toyota’s coming hybrid and plug-in hybrid vehicles could make Chrysler’s future untenable, and is seeking to undercut Americans’ interest in fuel efficiency.

To be sure, the Chrysler offer limits how many gallons are covered under the plan, but once the genie is out of the bottle, consumers likely will just move on to the next discount offer and the next. Eventually, nearly every American may carry a discount gas credit card, but that won’t increase the amount of gasoline that’s available, so the pain of super high pump prices will be excruciating in other countries.

It may not be until electric and plug-in electric vehicles that can run on the equivalent of about $1 a gallon of gasoline are widely available that the lure of these credit cards will be broken. The sooner that happens the better it will be America as a whole.