This is the worst recipe for cheap moonshine I've ever read about.
Regarding removing trace water content from gasoline, anyone considered freezing? Cold gasoline would unfortunately pick up moisture out of the air, so one would need to take steps to avoid that. But putting your gas can in a freezer (-18 C) then transfering it to another container would possibly leave behind any moisture as ice inside the original container. Might work?
Doesn't gasoline pretty much always have some trace of water content anyway and it generally isn't a problem in most fuel systems?