Mike Johnson is "frustrated." Matthew Hiner is outraged. And Blake Kezar, well, he bought a scooter because "it's so crazy." Why is everyone seething? As gasoline prices drop across the country, they are rising in Idaho, and that has everyone from Johnson to Kezar a bit peeved. Between August and September 2011, Gem State residents were paying on average 21 cents more per gallon than the national average [source: Evans].
Everyone knows that gas prices go up and down like the Boston Red Sox in September. A war in the Middle East; the lack of confidence in the stock market; seasonal demand; an oil spill in the Gulf of Mexico -- they all affect the cost of crude oil. As a result, the price of gasoline increases. It's economics 101. But why do gas prices fluctuate wildly from state to state, and region to region? And equally frustrating, why are gas prices so different in the same community?
The price at the pump is chiefly affected by crude oil prices and the vagaries of supply and demand. Even when crude oil prices are stable, gas prices will change if something disrupts the supply. Easy enough to understand, right? But why are prices sometimes radically different in the same neighborhood or even on the same street?
For one thing, the retail price of gasoline is often higher in some states than others. State gasoline taxes are one reason for the price difference. In addition, gas is usually more expensive farther from the source. That's why gas prices along the Gulf Coast are cheaper than gas prices in, say, Idaho. That's because the Gulf Coast is the source of about 26 percent of the gasoline produced in the United States. In addition, oil refineries, which process crude oil into gasoline, are located in that region [source: U.S. Energy Information Administration]. Sorry Idaho.
Gas prices are also more expensive in areas that have fewer gas stations. Even gas stations that are in the same neighborhood, or on the same road, can have radically different prices because traffic patterns might be different. One station might pay a higher rent than another or one gas station might have problems with its supplier [source: U.S. Energy Information Administration].
What's a motorist to do? Don't give up. There are ways to beat the system. Go to the next page and we'll tell you how.
Todd Larson of Shorewood, Minn., has made finding cheap gas an art form. Work has him traveling 800 to 1,000 miles (1,287 to 1,609.3 kilometers) a week. Since gas prices can vary by more than 25 cents a gallon (3.785 liters), Larson is able to save 4 or 5 cents per gallon every time he fills up [source: Weston]. Follow these tips, and you too can save money when you're on the road:
- Get away from the highway -- Gas is usually more expensive near the interstate because real estate prices are higher than they are a few miles down the road. A station near the highway will probably charge you a pretty penny for gas, while one down the road might be cheaper [source: Smith].
- Hit the wholesale clubs -- BJ's, Costco, Sam's Club and other wholesalers offer gas at a discount to members. Moreover, grocery store chains, such as Stop & Shop in the Northeast, provide "gas points" to shoppers who use their reward cards. You just have to fill up at a participating station.
- Pay cash -- Here's a no-brainer: The price of gas is usually cheaper if you don't use a credit card. Although using cash is so last century, it could save you a few dollars each month. There are also stations that discount gas prices to customers who pay in cash.
- Early bird gets the deal: Buy gas in the morning or late at night. Most gas stations change prices during the day so if you pull up to the pump before the change occurs, you can save a few cents.
- Shop the wrong side of town: Visiting the "other side of the tracks" can save you money, too. In nicer neighborhoods, a gas station's overhead tends to be higher than in less savory sections because land is more expensive, as are property taxes. In addition, avoid buying gas near car repair shops. Those prices tend to skew upward [source: Weston].
- Watch for local price wars and promotions: Price wars can break out anywhere at any time. Keep an eye out when one gas station goes after another, or a radio or TV station is offering a gas promotion.
All of these tips require some thought and planning. But what if you're on a road trip? Go to the next page to see how technology can help.
Tips for the Tech-savvy
Looking for a gas station when you're on the road is nothing short of painful, especially if you have screaming kids in the backseat. And if you're looking for the cheapest gas, well multiply that frustration by 1,000. Thank goodness for the 21st century. Our connected society has made it infinitely easier to do many things, including finding the cheapest gas. When you're on a road trip, take your latest gadgets and follow these tips:
- Check the Web -- If you're on the road make sure you're connected, either through a mobile device or Wi-Fi (some newer cars come equipped with a wireless Internet connection -- so cool). When the tank is low, check out GasBuddy.com and FuelMeUp.com. These sites study trends across the country and can direct you to the cheapest gas [source: Schultz].
- Choose your apps -- If you don't know your app from a hole in the ground, expect to pay a premium for gasoline. Within the past year, the number of mobile gas apps has swelled. The apps use your smartphone's GPS to locate the cheapest fuel using information provided by other penny-pinchers. GasBuddy is one of the more popular apps. There are versions for Android, iPhone, BlackBerry and Windows 7. Those who use the apps say it's easy to save 20 cents a gallon without driving great distances out of the way [source: Yu].
- Onboard systems -- GPS and other navigation systems can point the way to cheap gas. Some satellite radio systems have a travel data feature that can link you to price information as you drive. Just type in a ZIP code and fill'er up.
Everyone wants a loaded car, but it's expensive to get all the options. Learn about some of the coolest of the cool car bits at HowStuffWorks.
- Car Smarts: Gas Prices
- How Gasoline Works
- How Gas Prices Work
- How Gas Pumps Work
- How Oil Refining Works
- How does oil speculation raise gas prices?
- Is there a correlation between gas prices and obesity?
- Why is summer fuel more expensive than winter fuel?
- How does a gasoline pump at a filling station know when the tank is full?
More Great Links
- Evans, Scott. "Gas prices in Idaho on the Rise, declining elsewhere." NWCN.com. Sept. 27, 2011. (Sept. 28, 2011). http://www.nwcn.com/home/?fId=130672588&fPath=/news/local&fDomain=10227
- Schultz Saranow, Jennifer. "More on Finding Cheap Gas." The New York Times. Feb. 3, 2011. (Sept. 28, 2011). http://bucks.blogs.nytimes.com/2011/02/03/more-on-finding-cheap-gas/
- Smith, Steven Cole: "How to find cheap gas on the road." Orland Sentinel. Nov. 18, 2010. (Sept. 28, 2011). http://articles.orlandosentinel.com/2010-11-18/business/os-auto-scscolumnsidebatr-111910-20101119_1_cheap-gas-gas-prices-cheapest-gas
- U.S. Energy Information Administration: "Gasoline Explained: Factors Affecting Gasoline Prices." (Sept. 30, 2011). http://www.eia.gov/energyexplained/index.cfm?page=gasoline_factors_affecting_prices
- U.S. Energy Information Administration. "Gasoline Explained: Regional Gasoline Price Differences." (Sept. 28, 2011). http://www.eia.gov/energyexplained/index.cfm?page=gasoline_regional
- Weston Pulliam, Liz. "12 ways to find cheaper gas." MSN.com. (Sept. 28, 2011). http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/10waysToFindCheapGas.aspx
- Yu, Roger. "Looking for cheap gas? Apps can point the way." June 12, 2011. (Sept. 28, 2011). http://travel.usatoday.com/news/story/2011/06/Looking-for-cheap-gas-Apps-can-point-the-way/48326136/