Wednesday, October 11, 2006

Dog Bites Man, Price of Gas $2.53

Six month chart courtesy of Seattle Gas Prices.

Drove by the Safeway in West Seattle today and saw regular unleaded for $2.53. The prices, they are a droppin'. How low will they go?

Any time I think about gas prices, my mind always turns to people who go to great lengths to save a couple of pennies per gallon. The irony in all this is that the worse your gas mileage, and the higher the prices, the less it makes sense to drive any distances to save a few pennies.

Unless the savings per gallon is significant it may be costing you money to drive any distance to root out the cheapest gas. If you have a 20 gallon tank and you fill up all 20 gallons, a six cent price differential will net you $1.20 savings. Assuming you won't always have an absolutely empty tank, that savings drops per gallon already in the tank. Given the meager savings, the station sporting the .6 per gallon savings had better be very, very close.

My vehicle (an SUV) is only averaging about 15-18 miles per gallon. If I have to drive more than a couple of miles out of my way (doubling that in a round trip situation) I can quickly eat up $1.20 in savings at the current price of gas.

For instance, I usually grab a bite (purchase lunch) during my day at work. Some days when I'm trying to save money, I'll take my lunch. But if I forget my lunch and decide to drive home to eat it, the round trip from work to the house will cost me approximately $5 at the current price of gas considering my current gas mileage.

It's funny how people perceive the cost of things-- especially gas prices. It seems to me that most people don't think long and hard about the cost of trying to save a very small amount of money.

Conversely, the only time it makes sense to seek out a few pennies difference in gas prices is when you get very, very good mileage on your vehicle. If you drive a total of 6 miles out of your way, and you're getting 35 miles per gallon, then very little gas will be used to cover that six miles. At the current price of gas (stated above), if I drive 6 miles out of my way, I spend .92 cents getting to the cheaper station. Assuming a .6 differential, I'll save a total of .28 cents.

Basically, using very round numbers and assuming the current price of gas, it costs me about .15+ cents per mile to drive, period. That does not take any wear and tear, insurance or any other things that are usually factored into 'cost per mile'.

So you guys with big pickups, and poor mileage, fill up down the street, even if it's .10 higher than the station across town.

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