Last week, I shared some tips on saving money on gas (or petrol as the Brits call it). I had mentioned that two stations within a quarter-mile of each other were on opposite extremes of the price spectrum. While ironic that they are so close to each other, they both exemplify ways to identify good and bad places to buy gas.
While the individual station with the best price usually changes from week to week, there are a few trends to that will help you know where to look and where not to bother.
Bad Places to Buy Gas
Go to any given part of the country and the most expensive gas you will find will be the station visible from the interstate.The rule of thumb seems to be that if you can read the price from the highway, be prepared to be ripped off.
There is a Loaf n Jug off of I-25 near Johnstown that is consistently 10-20 cents more expensive than the King Soopers my wife works at. These stores are part of the same company and are on the same gas route. They are just 20 miles apart. It’s the same gasoline from the same source for the same cost. The overhead costs are probably lower for Loaf n Jug. The only difference is that drivers in town know other places to buy gasoline, but out-of-state drivers driving down the interstate don’t know what other gas stations may be near-by.
Big name brands
I know a lot of people are into brand loyalty. My college roommate’s father has only ever purchased from Exxon in his entire life. Can you imagine going to the same gas station for 50 years? I really feel sorry for the guy because Exxon is one of the most expensive places in NJ to buy gas. The only place I’ve ever seen beat out an Exxon is a Shell. Shell’s that are attached to independent convenience stores tend to be reasonable (see more on that below), but the stand-alone ones seem to have a premium to their price tag.
This same trend seems to play out with other brands as well. The gas cards you can sometimes get from the Workforce Center are for Diamond Shamrock, the most expensive gas station I’ve found within the city limits. The times I’ve gotten that $5 gas card, I’ve gotten that much gas and then continued down the road to a cheaper station.
Good Places to Buy Gas
Just off the highway is usually pretty expensive, but when there are a bunch of gas stations clustered around the exit, they tend to be more reasonable. The same goes for off the highway, as well. When I was in my teens and twenties, my hometown only had one gas station. It was a dreaded Exxon, but they were more expensive than the other Exxon’s a couple towns over. Why? Because it was the only gas station in town!
When there is another gas station nearby, the two owners are in direct competition with each other, which drive down prices. One owner may want to raise prices, but will be unwilling to because the higher price will drive customers to his competitor across the street. An extreme example of this is that price war I had mentioned last week that rewarded me with gasoline that was cheaper than a cup of coffee.
Attached to a store
Gas stations owned and operated by a store are going to be cheaper than gas stations without one. Adjusting for all other variables, this is the one rule that I have never seen broken. The reason is pretty simple. If there is a store, they are going to make most of the money with the store. The gas station is just a means of getting more people to come to the store. The gas station itself doesn’t need to make any money that way; it operates more like a loss-leader.
An independent gas station, however, has no such support. It’s only way of making money is by selling gas. They can’t afford to practically give their gas away like the store-attached filling stations. That’s one reason new gas stations always have some sort of convenience store. That’s where the money is and they just can’t compete in the gas game.
Gas stations attached to supermarkets tend to be cheaper than stations attached to convenience stores. I guess the same logic applies. A supermarket does a lot more business than a convenience store and needs less profit from the gas itself.
Have you identified any other trends in finding the best and worst places to buy gas?