June 10, 2008

Gas Price Irony

One of life's little ironies. The higher gas prices go, the more likely people are to go out of their way to save a few pennies per gallon. Now, this might not seem ironic at first, but think about it - the higher the base price of gasoline, the *LESS* important ten cents is.

I've made a chart that demonstrates all of this, but I'll try to explain it as well. Some people will get the chart better, some will get the words. So, I'll do both.

Back in 2000, when gas was $1.50 a gallon on average, (this is for my fellow Americans, btw, I don't know what other countries' gas prices or gas buying habits are), it made sense to do a little driving to save 10¢. Because, that 10¢ reprented 1/15 of a gallon - and on a 15 gallon tank of gas - that's an extra gallon of gas for the same price of a fill up. I'll come back to this example in a minute.

Today, the average price of gas is hovering close to $4.00 a gallon. So a savings of 10¢ is only 1/40 of a gallon - or (on that same 15 gallon tank) - an extra 15/40 or 0.375 gallons per fill up.

Now, lets put that in a little perpective, back at $1.50 a gallon, driving 5 miles out of your way (and thus driving 5 miles back - for a total of 10 extra miles) might have made sense. If your car gets 20 mpg, then that extra gallon you got (see two paragraphs ago) paid for the extra drive - and still gives you 10 more miles of driving.

Today, at the $4.00 mark, with a 15 gallon tank, you'd have to drive less than 3.75 miles out of your way (7.5 mile round trip) to even break even. (You get 15/40 gallons extra - or 20*15/40 miles, which is 7.5 miles.)

Let me put it this way, the amount of "Free gas" you got by shopping around back at $1.50 is a whole lot more than the amount of "Free gas" you get now.

I do understand that "Every little bit helps" - but not when you are actually using *more gas* than you are getting by shopping around. In every way, you are actually paying *more* for gas, if you drive farther than you save.

Now, if the cheaper gas is across the street, and you have more than fumes in your tank, of course it's cheaper to drive over there, (unless there is a huge line and you leave your car idling while you wait).

Also, a key feature that neither the chart nor my examples take into consideration is the value of your time. Back at $1.50 it might have cost less money to drive 5 miles out of your way and 5 miles back - but, in the city that 10 mile round trip could take you 20 minutes or more. Which, at minimum wage is almost two bucks right there. And, your "free gallon" was only worth $1.50... So, you lose money that way, and that's without adding back in the cost of gas for driving that far - once you do that, you've lost more than $2.25 - or more than 1.5 gallons - by trying to "save money".

I said all this to say - stop wasting time, wasting money, wasting gas, and polluting more - by stressing and planning and freaking out about trying to save a few pennies a gallon. It's just not worth it. If you really want to save money - take a bus, walk, ride a bike, or stay home.


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