Experts explain gas-price inconsistency, how you can save at the pump
Gas prices are constantly changing, often making it difficult to strategically plan when you fuel up in an attempt to save money.
showing the average price each day in Kansas over the past month, shows a trend that's starting to go down as we approach Memorial Day. But it's unknown what could happen between now and next weekend.
When it comes to how companies determine gas prices, it all starts with oil. The price of oil can be affected by anything from government tariffs to weather to where the oil comes from. The price of oil fluctuates as much as the price of a gallon of gas, but all gs starts with oil.
"The gas is manufactured from the crude oil and the crude oil is ether found regionally or piped from the gulf coast," explains Jump Start Stores President Phil Near.
Near says the gas many of us use in Kansas comes form one of three refineries. How much the refinery paid for the crude oil is figured into the price it charges retailers for the gas made from it. The retailer pays state and federal tax on the fuel, and then has it trucked to their stations where the retailer sets a price they hope will make them money.
So, why does the price vary day to day at the same station that has the same gas in its tanks as the day before?
"We sell enough fuel that it's not in the ground very long," Near says. "So, if we have a delivery today, it's not going to be around more than a day or two. So, it's not like we're sitting on cheap inventory or high-cost inventory."
Competition is also a factor.
"Typically, what will happen is, a competitor will lower their price for whatever reason near our location and we ill follow that competitor," Near says.
Finally, if a station knows it can get a higher price for its gas, that's what it will charge.
"It's really just a simple economic principle of supply and demand," says Shawn Steward with AAA (Triple-A) Kansas. "If there's more demand for something, you can get a higher price for it in the market. It really is what the market bears. The gas retailers, gas stations and convenience stores got to set the prices of what they want the gas prices to be,a and that really depends on what the market can bear.
Fewer people travel in the winter and fall, so there's less demand, and prices are typically lower than in the summer. The type of gas we use in the summer costs more too.
"Gas retailers are required to offer this summer blend of gasoline this time of year, but it costs more to produce and that extra price is usually passed on to drivers at the pumps," Steward explains.
The good news for Kansans is that generally the best gas prices are in the middle of the country.
What can you do to make your money go farther at the pump? Gas Buddy says you should plan your trips. Its study shows Friday, Saturday and Sunday are the most expensive days to fill up while Monday and Tuesday are the cheapest.