10 TIPS TO HELP YOU SAVE AT THE PUMP
Maybe $20 fill-up is a bit of a stretch, but we are all feeling the steady rise of gas prices. As of May 7th, the national average price of gas per gallon was $2.82. A year ago it was $2.34. The average price in Michigan is $2.84 with $2.42 being the lowest. In the grand city of Ypsilanti, we’re looking at about $2.92 per gallon. So, what is really going on?
WHY SO HIGH?
There are several reasons why we are seeing an increase in what we pay at the pump.
- INTERNATIONAL FACTOR
On Tuesday, May 8th, President Trump announced the impending exit of the Iran nuclear deal and that strong sanctions will be imposed on Iran. In anticipation of Trump’s announcement, oil prices increased and for the first time in four years crude prices topped at $70 per barrel.
- SEASONAL DEMAND
Gas prices usually increase in the spring and summer. The demand for gas rises because of summer vacations and an increase in car travel.
- COMMODITIES TRADING
Commodities traders purchase oil and gasoline based on what the projected price will be. If the traders believe that the price will be high, their bid will be even higher than the projected cost in order to receive a profit.
- SUMMER BLEND GASOLINE REQUIREMENTS
The Environmental Protection Agency (EPA) was created to control and reduce the atmospheric ozone. Therefore they require refiners to make “winter blends” and “summer blends” of gasoline. It is more expensive to create summer blends. There are state and local regulations that require refiners to make more than 20 different summer blends. This increases the costs of distribution and production which in turn raises the price of gas.
HOW CAN I SAVE MONEY AT THE PUMP?
Here at Timothy Roberts & Associates, LLC we believe saving money where possible is a critical step to finding the financial freedom that we all desire. With that in mind, here are some tips to help you save money at the pump.
- Simply slow down
According to the Department of Energy, every 5 mph over 50mph is like paying an additional 18 cents per gallon for gas. The faster you drive, the more you pay for gas.
Consider ride sharing to work and school or even using public transportation. Park your car during the week and only drive on weekends. Spring and summer is a great time to be outdoors and get more fresh air and exercise.
- Combine your errands
It would take a little organization, but it would be worth it to take care of centralized errands. Park your car in one spot and walk from one place to another to get your business done.
- Lighten the load
Try not to use your trunk to store things long-term. Your vehicle uses more fuel the heavier it is.
- Schedule the day and time you purchase gas
Auto expert Lauren Fix says that Wednesday is the best day to fill up. She says that “prices tend to rise on Thursdays in anticipation of weekend travel”. In a recent study, the Louis Federal Reserve found that filling-up on a Tuesday or Wednesday saved 8-9 cents per gallon which is more than $60 per year. Early is better as well. Gas station owners will increase prices after about 9 am. By that time owners have checked out their competitor prices.
- Use the 10 second rule
Turn off your engine if your wait is longer than 10 seconds. According to the U.S. Department of Energy, idling will drain your gas tank by a quarter to a half-gallon of fuel per hour. Restarting only uses 10 seconds worth of gas.
- Pay with cash
The convenience of paying with a card at the pump or even inside is costing you extra money. Paying with cash can save you 10-15 cents per gallon. Most gas stations charge less when cash is used. It saves them money on credit card fees.
- Do not top it off
You should stop pumping when you hear the first click. Even if you round out your gas purchase, that gas is most likely to spill out or evaporate. It is also important to make sure that gas caps are secure and screwed on properly.
- Take advantage of gas loyalty and rewards programs
There are credit cards that offer rewards for gas purchases. You can check with the gas stations that you regularly visit. They may offer a loyalty or rewards program. You should also look into your grocer. Many chains offer a loyalty/ rewards program that allows you to save on gas when you purchase groceries.
- Use an app or website
There are several apps or websites that can help you keep up with gas prices as well as help you save money on gas. Here are four to check out.
- GasBuddy- www.gasbuddy.com
- Geico- www.geico.com/save/local-gas-prices/
- Waze- www.waze.com
IT’S NOT AS BAD AS IT COULD BE
According to the Oil Price Information Service (OPIS), a typical family will spend about $200 more this summer on driving. Tom Kloza, who is the head of energy analysis at OPIS concludes that "It will be more painful for motorists than the past two years — but nothing close to 2011 to 2014 when it was $3.40 to $3.60 a gallon". So, although gas prices are rising we have seen worst in times past.
We really hope that you gained some useful information that will help you reach your financial goals. Visit our website often for more helpful information at www.timothyrobertsllc.com . Also, please share these tips with your friends and family so they can get in on the savings too. Don’t forget to follow us on FaceBook and LinkedIn and we’ll be back with more valuable information on next Wednesday.
Until then remember, Your Interest is Our Only Interest!