How To Save On Gas: Start Saving On All Your Fuel Purchases
June 2, 2022
New records are being set again in Florida and not in a good way. The state average price for gasoline has reached new record highs this past month. This beats the previous record of $4.38/g, set back in March (soon after Russia invaded Ukraine). Before this year, the record high was $4.08 per gallon, which was set back in 2008.
"Drivers are dealing with unprecedented pain at the pump and things could soon get worse before they get better," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "We saw more big gains in the gasoline futures market recently, which could trickle down to yet another 10-20 cent jump at the pump in the near future."
Global fuel supplies are tight; keeping upward pressure on oil prices (which account for more than half the price of gasoline). The fuel market was tight heading into 2022, as many oil producing countries had yet to return to Pre-Pandemic Levels, even as demand rebounded.
How Did We Get Here?
The COVID-19 Pandemic threw oil markets severely out of whack two years ago and they still haven’t fully recovered from the lack of demand during the Pandemic. When COVID first hit, it put a deep dent in global oil demand as many routine activities shut down and millions of people who usually drive to work or other activities stayed home. As a result, crude oil prices plunged. In fact, at one point in April 2020 crude prices actually fell below $0.
Negative prices didn’t last long, but oil stayed extremely cheap for much of 2020. That led energy companies and major oil exporting countries in OPEC to slash their production because no one wanted to give away barrels of oil at such rock-bottom prices.
Since then, the world has slowly gotten through the Pandemic and oil demand has come roaring back, especially in the United States. Consumers who missed out on travel and other normal activities in 2020 and 2021 are making up for lost time now. U.S. oil demand is about back to where it was Pre-Pandemic.
The Russian Invasion of Ukraine compounded the problem, as the oil market effectively cut out one of its largest oil exporters in the world (Russia). Fuel price gains accelerated even more during the past few weeks, when the EU announced plans to ban Russian oil by the end of 2022. The primary market driver of this news is that these countries are heavily reliant on Russian fuels and will now have to find alternative sources in what is already a tight global fuel market.
Politics also plays an issue in the market, President Joe Biden came into office vowing to transition the U.S. Economy away from fossil fuels. The Administration also canceled the Keystone XL Pipeline, which would have carried more than 800,000 barrels per day of Canadian crude to U.S. refineries. This anti fossil fuel approach has added to the turmoil and increased prices at the pump. Oil companies are being cautious, they don't want to gamble on spending Millions upon Millions of dollars if the rug could be pulled out from underneath them from a political agenda.
Is there a light at the end of the tunnel?
The International Energy Agency forecasts that sky-high fuel prices will cause U.S. oil production to return to Pre-Pandemic Levels by the end of 2022. According to the latest readings from the EIA, U.S. oil production is at 11.8 million barrels per day, which is about 10% below the Pre-Pandemic record-high of 13.1 million barrels per day.
A return to previously record-high production levels could cool the fuel market and lead to lower prices. However, given the recent shifts in global supply and demand, it may not immediately signal a return to $2 per gallon of gasoline.
"Unfortunately, $4 of gasoline is likely to be that unwelcome passenger on most Florida summer road trips," Jenkins continued. "At this point, the state average is not expected to exceed $5 per gallon. However, the fuel market is extremely unstable and things are changing by the day. Either way, drivers should expect gas prices to keep fluctuating throughout the summer and potentially the rest of the year."
Ways To Start Saving On Your Fuel Purchases
There are ways to save gas by carpooling or taking public transportation, we all know this. For many of us, those aren't always an option, so how do you save money on every gallon of gas you need during your commute? Here are some ideas that just might save you a little money without making you jump through hoops.
Rather than drive across town to save a nickel per gallon, it’s much better to find convenient stations along your commute or places you pass frequently. You can track local gas prices using GasBuddy (https://www.gasbuddy.com), which aggregates price data from user reports. Not only can the App find you a location along your route it can also save you money with their FREE FOREVER GasCard. Turn everyday purchases such as Chewy, Uber and Old Navy into free money for gas. You can also take advantage of shopping and dining deals through GasBuddy and earn 'GasBack' to spend at the pump using your Pay with GasBuddy Card. Here is the process: 1: Download the GasBuddy App, find relevant GasBack offers at retailers you currently use on the savings tab. 2: Shop, Dine, Park, Earn is their motto. Earn GasBack on each qualified purchase, you can earn up to 10% of your purchase or a lump sum. 3: Save Big At The Pump: Automatically redeem your GasBack at the pump when you pay with your Pay with GasBuddy Card. In addition to your GasBack, this free card saves you up to 25¢ per gallon.
Another good option is to join a warehouse club such as Costco, plus you can shop for groceries in the store, two birds, one stone as they say. Win! Win! Recently, the difference between the cost of regular fuel at a major oil company’s gas station and a local warehouse club was over 45 cents per gallon. Combine that with a member’s credit card and the savings add up even faster. Check out the Web-Site for information on how to participate: https://www.costco.com/gasoline-cash-back-rewards.html
If you are a AAA Member you can save at least 5¢ per gallon every day at participating Shell Stations with every fill up. This offer is valid through the end of 2023. Plus, you can earn an additional 25¢ per gallon when you join the Fuel Rewards® Program. You can find out more about this program by visiting: www.fuelrewards.com. Shell is one of the largest fuel brands in the U.S. with over 13,500 retail fuel sites, so you should be able to find a convenient location along your route.
You can also go to the track to save gas, no not the horse track but a RaceTrac Fuel Station. RaceTrac Stations are plentiful throughout South Florida, so you are sure to find one in your neighborhood. How does their reward program work? You can sign up fast and easily, either download the App or Sign up On-Line: https://www.racetrac.com/Rewards/RaceTrac-Rewards Select the membership you like and start saving. They even have a VIP Program for $2.49 a month, you save 10 cents per gallon on your first 40 gallons and 3 cents per gallon on each additional gallon every month.
Circle K also has an Easy Pay Program and yes it's pretty easy. Here’s how it works: Step 1: Pick up an Easy Pay Card. You can find Easy Pay Cards at participating Circle K Stores. Step 2: Link the card to your checking account. Your Easy Pay Card will act as a debit card for your checking account. You’ll be able to sign in directly to your bank’s Web-Site to connect it. Step 3: Start saving money. Save 30¢ per gallon on your first 100 gallons of fuel and $0.10 per gallon after that. You’ll be required to enter your PIN at the start of each transaction to ensure the protection of your account.
For the future, gas prices don't seem to be coming down anytime soon. According to Natasha Kaneva, Head of Global Commodities Research at J.P. Morgan, prices could go to over $6 per gallon in the summer. So start the process of finding a savings program that fits your commute, it's money that you can keep in your pocket.