Gas prices are up more than 25 cents in the last two weeks. Experts say the national average of $2.75 is the highest it’s been since early 2020. And some investors are predicting they’ll surge another 20 percent this year.
“They’ve climbed back up recently and they’ve climbed back up relative rapidly,” Dave Swenson, an economist at Iowa State University, told television station KCCI 8 in Des Moines, Iowa, recently. “They are now close to what they were prior to the pandemic.”
So BILLSHARK thought this would be a good time to review the best ways to save money on gas.
Why the increase?
There are a number of factors that are causing prices to escalate.
The first, of course, is that they were artificially depressed in the last year due to the pandemic. People stayed home to avoid the coronavirus, and the resulting lack of demand reduced prices.
Another cause is the optimism fueled by the rollout of three effective vaccines for the virus, causing investors to believe that the worst of the pandemic is almost behind us. This belief is causing investors in oil “futures” (what they think the future price will be) to drive up the cost of crude oil.
“The biggest contributor to rising oil prices is the hope in the market that the COVID vaccine[s] will help global fuel demand recover,” AAA spokesman Mark Jenkins told The South Florida Sun-Sentinel.
A third reason is the extreme cold wave that hit Texas and Louisiana last month, not only devastating the population there, but virtually halting oil refining in those states.
“So much capacity shut down it is having a wide effect coast to coast,” Patrick De Haan, head of Petroleum Analysis at GasBuddy, told WTHI-TV 10 in Terre Haute, Indiana.
Finally, of course, is that gas prices always rise in the spring. People drive more when the weather gets nicer, and at the same time, gas stations begin making the switch to summer-grade fuels, which temporarily impacts supply and thereby boosts prices.
5 Ways to save money on gas
1. Shop around
Download one of the many popular smartphone apps like Gas Guru,GasBuddy, or AAA’s TripTik to help you find the lowest prices around town or on the road. (GasBuddy also offers a reward card to save you five cents per gallon when you fill up.)
“Too many motorists just pull up to the closest pump and end up overpaying,” De Haan told CNBC.
But don’t drive miles out of your way to save a few cents per gallon on gas. Unless you have to be in that area for some reason, the time lost, the wear-and-tear on your car, and the gas used to get there may cancel out any savings.
2. Plan your route
Combining trips and planning your route are two easy ways to save on gas. UPS plans their drivers’ routes to focus on right turns only wherever possible. That saves the cost of idling at intersections waiting to make left turns.
And if you’re not moving in traffic, shut off the engine. AAA says that a car engine consumes up to a half-gallon of gas per hour to idle, but a warm engine takes only about 10 seconds’ worth of fuel to restart.
3. Drive right
If you maintain an even speed on the highway, you’ll use less gas than if you constantly accelerate, decelerate, and brake hard. Set your cruise control to help you drive steadily.
“When going from 55 to 65 mph, we lost between four and eight mpg,” Jon Linkov, deputy automotive editor at Consumer Reports (CR), told NBC News, reporting on mileage tests CR performed. “If you’re driving 55 and you go 20 miles an hour faster, you can lose as much as 15 miles per gallon.”
4. Buy cheap
CBS reports that the price difference between nationally known brands and off-brand stations can be as much as 20 cents per gallon, or $170 annual savings for the average driver. And studies show that gas at both types of stations is essentially the same.
In addition, one analysis showed off-brand stations often receive their delivery from the same tank trucks that deliver to the name brand stations, and that even name-brand stations can receive gasoline from a different name-brand refinery.
5. Use cards wisely
Several credit cards offer cash back for using their card to refuel. If you don’t have a card that does, look around for offers like those from Bank of America, Amex, and Costco’s Anywhere Visa.
Also, many name-brand chains like Exxon Mobile, Shell, and BP offer loyalty programs that give discounts to their regular customers. In addition, most major grocery chains offer customer loyalty cards that let you put your reward points on grocery purchases toward gas purchases at their pumps.
At the same time, forget credit cards unless you pay off the balance every month.
“If you’re not paying off your bill, you end up giving the bank more money than the discount is worth,” De Haan told CNBC.
For another smart way to save money, and not just on gas, let BILLSHARK review your bills for free. You pay only if find you savings.