Why Gas Prices Are High – and 14 Ways to Save

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According to AAA, a gallon of gas costs less this week ($3.585) than it did last week ($3.641), last month ($3.792), or even last year ($3.783).

Of course, that’s a national average – in California, the average is $4.26, while in Bismark, N.D., it’s $3.49. Still, doesn’t it seem like prices should be lower? After all, U.S. oil production is up, while “net oil imports have dropped a third since 2005,” USA Today reports.

In the video below, Money Talks News founder Stacy Johnson explains why gas prices have remained stubbornly high. Check it out and then read on for 14 ways you can beat those high prices…

Earlier this year, Consumer Energy Report added up the cost of the various ingredients that go into gas prices. Here’s what it looks like:

  • Distribution and marketing: 6 percent
  • Refining: 6 percent
  • Taxes: 12 percent
  • Crude oil: 76 percent

So crude oil is most of the cost, and as Stacy explains in the video, oil is traded on a global market. So even though Americans are finding more and using less, developing countries like China and India are taking up the slack and keeping the pressure on prices. And tensions in oil-producing countries like Iran also cause prices to spike, because investors fear an interruption in supplies should fighting break out.

While we can’t control oil prices around the globe, we can stretch our gas dollars here at home. Here are a few obvious – and not so obvious – ways to conserve and save…

1. Take public transportation

Obviously, this works better in big cities. I live in New Orleans, and save hundreds each year taking the bus. One bus ride costs $1.25 and takes me all the way across town. If I took my 16-miles-to-the-gallon clunker, I’d use two gallons of gas – around $6.60 at current prices. That’s a savings of $5.35 each way.

2. Buy gas at a warehouse club

When I do buy gas, I buy it at Sam’s Club. You need a membership to fill up at one of the big bulk store’s gas stations, but I save an average of 10 cents per gallon.

3. Ease off the gas pedal

Aggressive driving – jumping on the gas when the light turns green and speeding to the next one – can decrease your fuel efficiency by 37 percent, according to auto site Edmunds. Simply driving moderately can give your car near-hybrid performance. Not only is this the single best thing you can do to use less gas, it’s free.

4. Don’t speed

Consumer Reports tested a sedan and SUV and found that decreasing the speed from 75 to 55 mph improved gas mileage by 35 percent. Leave a little earlier, be less stressed, and save.

5. Get a tune-up

After a tune-up – including an oil change, tire alignment, and air filter replacement – your car will run more efficiently. The Federal Trade Commission says you can increase gas milage by an average of 4 percent.

6. Find cheap gas with your smartphone

There are plenty of apps that help you locate the cheapest gas prices in your town. Here are my favorites:

7. Use the minimum rated gas for your car

My friend fills up with premium gas even though the automaker recommends mid-range for her car. She thinks it makes the car more fuel-efficient. It doesn’t. The FTC is really blunt about it: “It won’t make your car perform better, go faster, get better mileage or run cleaner. Your best bet: listen to your owner’s manual.”

8. Drop extra weight

Don’t carry about extra weight in your trunk or backseat. According to Bankrate, your car loses 1 mile per gallon in fuel efficiency for every 250 extra pounds you carry.

9. Drive to the farthest errand first

Popular Mechanics says you can increase fuel efficiency by grouping your errands and driving to the farthest location first. By driving a longer distance at a consistent speed, you give your engine time to warm up, which uses gas more efficiently.

10. Don’t idle

If you’re stuck in traffic, turn your car off instead of idling. Idling more than 60 seconds decreases your car’s fuel efficiency by 19 percent, according to Edmunds.

11. Coast

Slamming on your brakes in traffic is bad for your car and your gas mileage. If you can anticipate the lights and coast in gear until they turn green again, you’ll boost your MPG by up to 50 percent, Popular Mechanics says.

12. Use your cruise control

Cruise control is up to 14 percent more efficient than standard driving, Edmunds says. So use the cruise control on long, flat roads – but switch it off on hills, because your car will guzzle gas trying to maintain the consistent speed.

13. Check ethanol rates

Most gasoline comes with some level of ethanol, but higher levels lower your miles per gallon. Popular Mechanics says to avoid gas rated E15 – which contains about 30 percent less energy than pure gasoline. Look for a rating of E10 or lower.

14. Invest in oil companies

While these tips will help you conserve gas, you can’t really beat the big oil companies – but you can join them. In 2009, Stacy bought 300 shares of ConocoPhillips at $37 per share. Back in February, Stacy said those shares are now worth about $64 per share – or $8,000 more than he originally paid for them.

So while Stacy struggles with high gas prices like the rest of us, at least he covers the extra expense – and then some.

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