Saving Money by Filling Up on Expensive Gas?

Driving these days has become somewhat of a necessity for some people, unfortunately. With the gas prices going upwards to about $4.17 here in Seattle, it’s definitely a burden on one’s wallet. So being able to save money on gas is rather important. So when you see two gas stations kiddy-cornered to one another, one with $4.17 (the cheapest between 87, 89, and 92) and the other being $4.03, your first instinct is “Hey, let’s go to the one that’s $4.03 because I’d save $0.14 a gallon”. Right?

But is this really the case? If I were to see a Chevron for $4.17 and an Arco for $4.03, I actually would hesitate to go to Arco. I’ve actually told people to not go to Arco lately because of the logic I’m about to write here. Let me explain…

It’s really just some simple math. Now, let’s assume that you go fill up your car’s gas tank, which holds about 17 gallons of gas at the prices I’ve listed.

Chevron - $4.17/gallon x 17 gallons = $70.89
Arco - $4.03/gallon x 17 gallons = $68.51

So just looking at this math, it’s pretty clear that you save around $2.38 by filling up your tank. This is pretty good, right? Well, there’s something we’re forgetting. How much mileage you’re going to get out of that tank of gas.

Now, this is where I’m going to claim that “all gas is the same” is false. Something I’ve noticed when I’ve filled up my gas at various places (like Chevron, 76, Shell, Arco, and other places), is that I don’t exactly get the same amount of mileage on that tank of gas. Now you’re going to have to take my word on this for the sake of this argument. At places like Arco, I’ve actually gotten upwards of 60 miles less per tank of gas compared to filling up at places like Chevron or 76. Also, keep in mind that I am driving primarily on the freeways around Seattle to go to soccer games or to head down to UW, not driving around the surface streets. So my mileage on my tank of gas is maximized to its full potential for the most part.

But how does this affect the costs?  On my Camry, getting 60 miles less per tank of gas by filling up at Arco is upwards of two gallons of gas, as I can get around 26-30 miles per gallon on the highway (going to be on the high side of my mileage and to make Arco look a little better). Now, if you do the math… Losing two gallons of gas times the $4.03 per gallon of gas is roughly $8.06 lost because I didn’t get those 60 miles out of my tank. Basically what this means is to meet the potential mileage from Chevron by filling up at Arco, I’d have to spend an additional $8.06 to make up for those 60 miles.

So how does the math look now?

Chevron - $4.17/gallon x 17 gallons = $70.89
Arco - $4.03/gallon x 17 gallons = $68.51 + $8.06 = $76.57

Now this looks a lot different from what we had. Instead of saving $2.38 for a fill-up, I’m actually losing roughly $5.76 per fill-up. And if I have to fill up every two weeks, while the immediate savings of $2.38 is there, the long-term loss doesn’t seem to make it worth going there if I’m going to lose out on $5.76. The loss of two gallons of potential mileage means you have to go to fill-up more often, which in itself is bad since it requires more driving to get to the gas station.

Now, obviously, there’s a point where the tradeoff between the money you save from taking the cheaper gas immediately versus the money you’d lose because the amount of mileage you’d lose due to using the fuel that doesn’t burn as well will be zero. To calculate that, it takes some simple algebra. We know that it costs $70.89 for a tank of gas at Chevron, which has the better efficiency. To make up for those two extra gallons, we know that the cost of it will be 2 x $Y, where Y is the cost of the cheaper gas per gallon. Add in the 17 extra gallons with those two gallons and you get:

$Y x 19 gallons = $70.89
$Y = $70.89 / 19 gallons = $3.72 / gallon

So the price at which the cost to fill up the tank itself at Arco and the money lost due to lost mileage being equal is $3.72… Good luck finding a place like that around Seattle.

Now obviously there’s definitely some flaws to this argument. The case that I’m making about not all gas being the same definitely could be argued. Does each supplier have the same composition of gasoline? It’s definitely possible. Places like Chevron make the claim that their fuel burns more efficiently than others due to certain additives and chemicals, so to have the same composition would be kind of misleading to the consumer public. I also never really investigated this further to make sure that all the suppliers have different compositions to make this actually matter. This only comes from my observation of filling up at the gas station at the various places and keeping track of how much mileage I get from driving on the tank of gas that I filled up at.

Also, one could argue that my numbers are made up. Sure, I don’t have the receipts on me and mileage amounts. It would definitely strengthen my argument for sure, but you can do one of two things, you can either (1) don’t believe me and continue to go to Arco or the cheaper, less efficient places, (2) take my word for it, or (3) test it out yourself.

In times like this though, that amount that you save is pretty significant over time, assuming that not all the gases are the same. If you can save $5.76 per fill-up by going to the more expensive gas station, imagine how much you’d save over a year because of it, especially at these current prices. What it really comes down to is efficiency and the amount of mileage you get out of your tank. If your tank is giving you a lot less mileage, then you’re actually spending more to make up for the amount of miles you’ve lost for taking the cheaper, less efficient gas. So basically, just because it’s cheap doesn’t always mean it’s better.

Try out this experiment. Test it out for yourself and see if this is true for you.

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