by Dale Cooper
Gas prices seem to go up at the most inopportune times, with little or no warning. But if you look closely, patterns emerge that can help you predict the next spike. So why do gasoline prices fluctuate so drastically, and when is the best time to buy?
How Gasoline Prices Are Determined
Gasoline is refined from crude oil, which is a “commodity,” a good that satisfies a want or need. As such, commodities are subject to the economic forces of supply and demand. These forces are the reason gasoline prices fluctuate as dramatically as they do. When crude oil production is limited, gas prices rise; when there is an abundance of crude oil, prices fall. There are other factors at work as well, but the basic principle of supply and demand is what dictates the price of gasoline.
When to Buy?
Even though gas prices can change dramatically over a short period of time, there are recognizable trends that emerge. For example, gasoline prices are high during the summer months when most people take vacations. Also consider:
- Time of day – Gasoline prices will generally be at their lowest before noon as local gas stations normalize their prices to match competitors.
- Day of the week – Gas prices tend to peak during the weekend, so buy your gas during the middle of the week, especially on Wednesday.
Where to Buy?
You’ll often find that where you buy your gas affects the price as much as when you buy it. Average gasoline prices between states can vary by as much as a dollar per gallon. States on the West Coast tend to pay a much higher premium for gas than those in the South and Southwest. Locally, gasoline prices are usually higher in more affluent areas and near major freeways. It’s not usually worth the extra fuel to drive out of your way to a cheaper gas station, but keep in mind which locations offer consistently lower gasoline prices and fill up when you drive by.
When gasoline prices spike, consider other ways to save money save money on driving. Driving a more fuel-efficient car and finding more affordable auto insurance are two effective ways to cut costs. Browsing auto insurance reviews is a good way to find competitive insurance prices while making sure you’re not sacrificing quality and service.