Is It Worth Driving Further For Cheaper Gas?

When I was growing up, when the car fuel gauge was nearing empty we’d go in search for the cheapest fuel around. Often this would be several suburbs away, a 10, 20 or 30 minute adventure. I was taught at the time that this was a worthwhile activity, but never really questioned it.

Were we really saving any money?

Was all that driving around a false economy?

At which point is the saving actually worth it?

Let’s have a go at trying to answer these questions.

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How We Find Cheap Fuel

Here in some parts of Australia we have an app named “Fuel Check”, it is a government owned solution which pulls live petrol prices from pretty much every petrol station in the area. This allows you to find the best prices wherever you are.

Back in the day we didn’t have the luxury of apps. It was simply a case of knowing that petrol tended to be cheaper in certain parts of the city, so you would jump in the car and drive over to that part of town and look at a few places to work out which was the cheapest. This was highly inefficient, and luckily no longer a problem that we need to deal with …at least here in many parts of Australia.

On any given day the spread of petrol prices across the city can be wide, sometimes varying by 5-20%.

We’re Talking The Metric System

Now for all of my friends who are running on the imperial system, I send my apologies in advance, we are using metric measurements here. But I will add in a few conversions to help clear things up.

Gallons to litres (liters):

• 1 gallon = Just under 4 litres
• 1 mile = 1.6km

And when we talk about fuel efficiency, it is in litres per 100 kilometres):

• 5L/100 = ~47 miles per gallon (very efficient hybrid cars)
• 10L/100 = ~23 miles per gallon (many larger petrol cars)

We are also talking about “petrol” and “fuel”, which wherever you are reading from may also be referred to as “gas”. It is the stuff that you put into your vehicle in order to make it move!

Cost Per Kilometre To Drive

How much does it cost us to drive the car from point A to point B? Quite obviously, the more fuel efficient the car, the cheaper it will be to drive to a different petrol station.

For the sake of simplicity, we will determine cost per kilometre keeping petrol price at a constant $1.50L per litre. For simplicity, we will also ignore any additional maintenance required from driving the car extra distances in search of a bargain.

And we will use two types of cars:
1) A fuel efficient hybrid car, which uses 5L of fuel per 100km travelled, which translates to:

• 0.05L per 1km travelled
• 0.05L @ $1.50L = $0.075 (7.5c per kilometre)

This may be a vehicle such as a Toyota Rav4 Hybrid.

2) A common large petrol car, which uses 10L of fuel per 100km travelled, which translates to:

• 0.10L per 1km travelled
• 0.10L @ $1.50L = $0.15 (15c per kilometre)

This may be something along the lines of a Ford F150.

Calculating The Breakeven

When you are running out of fuel you are going to need to fill up somewhere, so driving to your closest petrol station is an expense that can’t really be avoided.

So here we aren’t looking at how far from home you need to drive to fill up, it is about the difference in distance between your closest option and the desired cheapest option. If your closest option is 5km from home, and the cheapest option is 12km from home, we only need to consider the 7km difference.

Once again for simplicity, we will keep fuel tank size at a rather standard 60 litres (16 gallons). We are also assuming that you will need a completely full tank, which in reality won’t be the case, making the numbers below more generous than reality.

5km extra total journey – break even difference

• Fuel efficient hybrid car: 37.5c driving – 60 litres of petrol would need to be 0.6c cheaper per litre to break even.
• Large petrol car: 70c driving – 60 litres of petrol would need to be 1.2c cheaper per litre to break even.

10km extra total journey – break even difference

• Fuel efficient hybrid car: 70c driving – 60 litres of petrol would need to be 1.2c cheaper per litre to break even.
• Large petrol car: $1.40 driving – 60 litres of petrol would need to be 2.4c cheaper per litre to break even.

20km extra total journey – break even difference

• Fuel efficient hybrid car: $1.40 driving – 60 litres of petrol would need to be 2.4c cheaper per litre to break even.
• Large petrol car: $2.80 driving – 60 litres of petrol would need to be 4.8c cheaper per litre to break even.

40km extra total journey – break even difference

• Fuel efficient hybrid car: $2.80 driving – 60 litres of petrol would need to be 4.8c cheaper per litre to break even.
• Large petrol car: $5.60 driving – 60 litres of petrol would need to be 9.6c cheaper per litre to break even.

Remembering that these are just the breakeven numbers. If the saving is any less than this then you will be losing money.

Calculating The Savings

Now that we know the breakeven requirements, the savings are simple to calculate.

Get your breakeven number from the section above, then any greater discounts go into your savings bucket. Once again we will assume the best case scenario where you are filling up the 60 litre fuel tank completely.

After removing the required breakeven saving:

• 1c cheaper – $0.60 saving
• 5c cheaper – $3.00 saving
• 10c cheaper – $6.00 saving
• 20c cheaper – $12.00 saving
• 40c cheaper – $24.00 saving

When was the last time I saw a 40 cent difference, where one place was charging $1.50 and another $1.10? I can’t say that I remember.

In reality, in most cases the differences in petrol prices I see are of a few cents per litre, and that’s before removing the breakeven number.

But let’s pretend it was a full 5 cents, and forget any breakeven required, and assume we can fit in the full 60 litres of fuel. We are talking $3.00.

The Cost Of Time

All of those trips to petrol stations many suburbs away, that was all done on the weekend. The weekend, the precious few hours each week where you can sit back and relax, do whatever it is that you feel like doing.

We must add SOME kind of value on this time.

The obvious choice is to work out your hourly working rate, then use that to perform any calculations. A flaw in this method is that it is the weekend, many people don’t have the option of turning on the working “money funnel” whenever they feel like it.

Another option is harder to put a price on. And that’s the price of missing out on relaxation time, the opportunity cost. Do you want to be out driving through traffic, or sitting on a lounge chair in the sun with a drink in hand?

Cost per distance (at an average speed of 60km per hour):

• 5km extra total journey: 5 minutes
• 10km extra total journey: 10 minutes
• 20km extra total journey: 20 minutes
• 40km extra total journey: 40 minutes

Now imagine if you COULD be earning money instead for each of those minutes (at $10/hour, $20/hour, $50/hour):

• 5km extra total journey: $0.83 ($10/hr), $1.60 ($20/hr), $4.16 ($50/hr)
• 10km extra total journey: $1.60 ($10/hr), $3.33 ($20/hr), $8.33 ($50/hr)
• 20km extra total journey: $3.33 ($10/hr), $6.66 ($20/hr), $16.66 ($50/hr)
• 40km extra total journey: $6.66 ($10/hr), $13.33 ($20/hr), $33.33 ($50/hr)

If you do have the option of choosing between working more hours OR driving to find cheaper petrol, working the extra hours is going to almost always come out ahead.

Is There An Answer?

We all love a bargain, myself probably more than most. The overall savings are smaller than expected, and this isn’t considering the cost of additional wear and tear on the vehicle either.

There is a bit of a sweet spot that needs to be found, and this will be different for everyone.

For me, the saving (after breakeven) is going to need to be above 5c to start with. Then, in addition, the location can’t be more than 5 kilometres out of my way. That will give me somewhere around $3 for 5 minutes of effort. I’m happy taking that.

The couple of cents difference that we commonly see between stations? It’s just not even worth thinking about it.

I’m also in the situation where I have multiple petrol stations with a similar proximity, and often I pass petrol stations and fill up even if I don’t need a full tank of fuel. These are the situations where the Fuel Check app comes into play, helping me to monitor general prices in the area and snap up the discounted outliers when they are either right next to home, or are going to form part of an existing journey.

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I still look back on those trips in the car hunting for discounted fuel when I was young with fond memories, maybe it was the desire to find a bargain that is permanently etched into my memory.

I’ll never know now what kind of savings we ended up getting, but, based on how long I remember these drives to be, it was likely a false economy.

I feel like I got something out of it though. The thrill of the hunt remains strong.

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