Why Are Gas Prices So High?
For months now, the high inflation rates (7.5% over the previous 12 months—the highest in 40 years) have been playing a huge role in driving up gas prices.2 But the war between Russia and Ukraine really threw extra gasoline onto the fire.
On March 8, 2022, the average price for a regular gallon of gas hit an all-time high of $4.17.3 Gas prices jumped 11 cents overnight and 55 cents since the week before!4 And also on that same day, President Biden signed an executive order to ban the import of Russian oil, natural gas, and coal to the U.S.5 This means we can probably expect gas prices to get even higher.
Also, prices at the pump are being impacted by the cost of crude oil going up too. In case you didn’t know, Russia is a major exporter of oil, and the war has made prices spike over here in the U.S.
The cost for a barrel of crude oil runs around $110 now.6 Oh, and let’s not forget about the Colonial Pipeline being hacked in 2021—that really threw a wrench into the supply chain.
What is being done to help lower gas prices? In November, President Biden told the Department of Energy to release 50 million barrels of oil from the Strategic Petroleum Reserve (the U.S. emergency stash of underground gasoline), but it didn’t do much to help gas prices to ease up.7 As of March 2022, the U.S. and 30 other countries are releasing 60 million barrels of oil from stockpiles.8 The hopes are that this will soften that crazy price surge, but no one even knows if it’ll really make a difference.
We can’t control the gas prices but there’s still something you can do about it. Here are 11 ways to save a little extra money on gas.
1. Shop around for the best gas prices.
But if you plan ahead, you can really save money on gas. One way is to use an app like GasBuddy that searches your local area to find the cheapest gas prices around. Or you can pay attention on your way to and from work or school dropoff to see what places offer the best price.
2. Combine your errands.
Don’t make a special trip to get milk when you can just pick it up on the way home from work. You can cut back on trips to the grocery store in general by meal planning and keeping a list of all the household essentials you need. The fewer trips out, the less you pay in gas.
3. Use that cruise control.
If you’re spending lots of time on the interstate, here’s a simple tip: Turn on your cruise control and save on gasoline and leg cramps.
4. Keep your tires inflated.
There’s a savings myth out there that overinflating your tires can save you money on gas. The reality is, this is a bit of a Goldilocks situation. Overinflating doesn’t help anything, and underinflating can actually hurt your gas mileage. But nailing the recommended tire pressure for your car is like that perfect bowl of porridge—just right.
5. Ditch the extra weight.
Take everything off your roof rack and unpack the trunk or cargo space. Turns out, the more your car is weighed down, the harder your engine has to work. And a harder-working engine is a gas-guzzling engine. Saving on gas can be as simple as getting all the junk out of your car!
6. Join gas rewards programs.
We aren’t talking about credit card “reward” points here. We mean that your grocery store may offer gas rewards for buying stuff you have to buy anyway. Cheaper gas from the place you already go to stock up on snacks? Yes, please.
7. Join a warehouse membership.
Don’t feel the need to run and get a membership but if you’re already a member at a store like Sam’s Club, you might as well take advantage of that extra savings on gas.
- Stop buying premium.
Unless you have a car that REQUIRES premium, switch to regular. Switching to regular gas is probably the easiest way to save 20 to 60 cents per gallon, and most drivers don’t even notice the difference.
9. Pay with cash.
Cash is king—even at the pump! Some gas stations charge a lower price per gallon if you pay with cash. It’s their way of skipping the processing fees.
- Fill up earlier in the week (and never on weekends).
Monday is typically the cheapest day of the week to fill up your tank.9 If you can’t make it on Monday, try for Tuesday or Wednesday. And whatever you do, avoid the gas station on Friday, Saturday and Sunday if you want to save money on gas.
11. Turn your car off while waiting.
Here’s a simple way to save money on gas—turn the car off when you’re not actually driving it. Keeping your car running wastes gas even if you’re not driving anywhere!
Gas prices are going to go even higher before they go down but hang in there and use these tips to help in the meantime!
This commentary was originally posted by Ramsey Solutions March 08, 2022
**Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.