Save On Gasoline by Understanding Gas Stations

Gas stations are a fickle industry.  They make almost all their profits on what you buy in the store not on the gasoline itself.  Very seldom are the items sold at a gas station a deal so I focus on how to get the best deal on the gasoline.

Now there are a ton of websites dedicated to finding the lowest price on gasoline, but in a pinch you can know you are getting the best price in an area by understanding two things about gas stations: taxes and volume.

Taxes are pretty straightforward. If you are on a trip and you are leaving a low tax state nine times out of ten you are better off filling up before you get to that state.  What most people don't know is that about 20% of your gasoline price is tax. The difference between each state in price is a combination of taxes and regulations.  If a state is high tax and high regulation (California) you will pay much more at the pump.  If a state is low tax and low regulation (Arizona) you can bet you will get a better deal at the border.

Understanding volume is a little more complicated.  It is pretty obvious that some gas stations are in better locations and thus sell more gasoline.  These  stations are called "pumpers" and can receive shipments of gasoline as many as three times per day.  That is a ton of volume.  What that means for the bargain gas shopper is that the prices at these stations keep up with whatever the market is doing.  So if there is a lot of gasoline inventory, like what we are seeing this fall, prices will drift downward.  These high volume gas stations will reflect the falling price much faster than the gas station that is hidden behind a meat packing plant.  The down side is when prices are rising the pumpers will reflect this price increase much faster.  So you may have to endure the smell of the meat packing plant to get the best price but you can laugh as you drive by the people who are paying 10¢ more per gallon.