Consumers are back to focusing on gas prices which are up to $3.68 per gallon and as high as $4.32 in California. This is understandable given that gas costs cuts into approximately 8.5% of the average family’s yearly income. Yet, there still are ways for consumers to save on gas costs.
The Price of Oil is a Leading Indicator
Many energy sector specialists are forecasting that the average gas price will reach $5 per gallon as early as the late spring. They attribute this prediction to geopolitical uncertainty in countries like Iran and refinery disruptions in the US. Obviously, the average consumer cannot control these outside forces, but, they can certainly utilize publicly available data to better prepare for the impact to their bottom-line and adjust their budget accordingly. For instance, consumers can track the price of oil to gain a general understanding of how much gas prices will either rise or fall in the coming months. Generally speaking, a $10 increase in the price of oil will result in a $0.20 to $0.30 increase in the price of gas. With the price of crude oil currently at $108, a $10 increase to $118 would cause gas prices on average to increase above $4 per gallon. To reach the $5 per gallon forecast, crude oil would likely need to be well over $150. However, we should point out that 30% of the price is impacted by other other costs such as state taxes, marketing and distribution, refining and of course inflation.
Make Sure the Pump is Accurate
The state employs inspectors from the department of agriculture to ensure that gas pumps are calibrated properly and the total cost is commensurate with the pricing per gallon. However, they usually can only inspect gas stations every 18 months which means a small portion of pumps may not be working properly. In these cases, it is up to the consumer to make sure they aren’t being overcharged.
Testing a Gas Pump
Wait at least thirty seconds before pumping gas to make sure that the meter isn’t running. Sometimes pumps aren’t calibrated properly as it is possible for the meter to move even if no fuel is being pumped. Next, make sure to review the amount of fuel dispensed and the total cost when the 5 and 10 gallon levels are reached. Sure, it will be difficult for you to tell how much actual fuel was dispensed from the pump but the calculation on the meter should still be accurate. Also, if you use the same gas station every week, it would be wise to check the latest inspection report which should be visible at the station or available with your state’s department of agriculture.
Look for the cheapest gas station
If you are like most commuters that take the same route to work, it would be wise to shop around. GasBuddy.com is a fabulous tool for finding the cheapest local gas stations.
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