Motorist’s Dream: Gas at 6 Cents a Gallon

Gassing up isn’t cheap: According to AAA, we’re now paying a nationwide average of $2.73 for a gallon of regular. That’s about 25 cents a gallon more than last year. But it’s certainly better than the year before, when prices shot up to over $4/gallon.

But if the cost of gas bothers you, be happy you don’t live in Asmara, Eritrea. (Never heard of it? Click here to see it on Google Maps.) This African nation boasts the highest gas prices in the world – nearly $10/gallon. On the other hand, you could be living in Venezuela, where prices are as low as 6 cents.

Here’s a list of the places with the highest and lowest gas prices in the world, courtesy of the Oil Price Information Service (OPIS).

The world’s highest gas prices:

1. Asmara, Eritrea – $9.59/gallon
2. Oslo, Norway – $7.41/gallon
3. Copenhagen, Denmark – $6.89/gallon
4. Hong Kong – $6.87/gallon
5. Monaco, Monte Carlo – $6.82/gallon

The world’s lowest gas prices:

1. Caracas, Venezuela – 6 cents/gallon
2. Tehran, Iran – 32 cents/gallon
3. Riyadh, Saudi Arabia – 45 cents/gallon
4. Kuwait, City, Kuwait – 85 cents/gallon
5. Cairo, Egypt – $1.17/gallon

So here we have a homogeneous product – pretty much the same in Caracas as it is in Asmara – ranging in price from 6 cents to nearly $10 a gallon. Why the big range? Looking at the list will offer the first hint: Most of the countries on the low-price list have lots of oil.

But another reason gas prices vary so widely is what the government does with gasoline. They control the price and/or consumption by loading on taxes, or in the case of Venezuela, subsidizing the price.

While the wild world of fossil fuel pricing is interesting, what gas costs in Asmara, Tehran and Oslo is ultimately only of interest to those who gas up there. What we’re interested in is paying less for gas in our own neighborhoods. How do we find the cheapest gas?

Use your smart phone

If you have a smart phone, go to where you can download apps (such as the Apple App Store or the Android Market) and do a search for “gas prices.” You’ll discover several free apps that will help you find prices at nearby stations. Note, however, that most of these apps are self-reporting – they depend on other app users to send in prices. That leads to two potential problems: First, gas prices may be out of date or inaccurate. Second, there’s nothing that prevents the station owner from gaming the system by putting in a false low price to attract customers.

There are apps that don’t depend on user-supported prices. AAA’s TripTik iPhone App, for example, uses prices reported by the Oil Price Information Service and are derived from credit card transactions at more than 100,000 stations around the country, updated daily. The problem with this reporting method? Price can change more often than daily, and while 100,000 is a lot of stations to survey, it’s not all of them.

Use your computer

There are several websites that will help you find the cheapest gas in your area. A few examples, all of which allow you to search by zip code:

• Gasbuddy
• MSN gas prices
• Gas Price Watch
• Mapquest Gas Prices
• FuelMeUp

Like the smart-phone apps, most of these sites feature user-reported prices or Oil Price Information Service-reported prices, so the same caveats apply.

Watch the weather: there could be cheaper gas prices in coming months

In doing research for this story, I talked to Fred Rozell, director of retail pricing for the Oil Price Information Service. He says that if the economy remains sluggish and provided there are no supply disruptions, we could see pump prices drop by as much as 50 cents a gallon after hurricane season.