Oil markets can be complicated, but they are always so. Keep your costs down by sticking to what you can control.
What is the short-term outlook for gas prices?
It is hard to forget June 2022 when regular gasoline was almost $5.
Jeffrey Barron, senior petroleum analyst with the U.S. Energy Information Administration, said that it was a remarkable year for many reasons.
He says that many refineries were closed during the pandemic or converted to make renewable fuel. In early 2022, people began to get back on the roads. According to the Federal Highway Administration, vehicle traffic in March 2022 was higher than pre-pandemic levels.
Barron argues that Russia’s invasion in Ukraine and the trade disruptions that followed from imposed restrictions have increased market volatility and costs.
“So, you have this kind of supply tightness at a time when demand was coming back in force.”
Since then, gas prices have fallen. According to AAA, the national average fell to $3.14 by mid-December. EIA’s most recent short-term energy outlook projects that regular-grade gas will be priced at $3.36 per gallon in the first quarter 2023. This is lower than last year.
The reason for the more optimistic outlook? Barron points out an increase in refinery capacity, both in the U.S.A and abroad, as well as a decrease in refining cost.
Why does some people feel that certain prices rise more than others?
Barron says that the rate of change in 2022 was especially jarring. It can be a psychological and financial toll when you pay $3.50 one day and then it goes up to $5 a few months later.
It’s not common for gas prices to rise by $1.50 per gallon in the same year.
However, since the pandemic began, we have witnessed an entirely new level of economic uncertainty. There are so many variables at play that you can expect the unexpected when it is about gas.
What can you do to reduce the impact of rising gas prices on your budget?
To make your gas money go farther, you need to focus on what you can control.
Take good care of your car
You may have wished your car had a cord because of the price rises in 2022. But, don’t sign up for a car loan until you are sure. Jonathan Kiehl is a Lancaster-based certified financial planner. He says, “I usually tell people that the cheapest car you will own is the one that you already have.”
Kiehl suggests that you spend your money on routine maintenance to keep your car in tip-top shape. It’s easy to save gas by doing regular oil and filter changes and adjusting your tire pressure. If your mileage per gallon is up, minor fluctuations in gas prices are easier to manage.
Avoid unnecessary trips by using Stack Errands
Do you need to go to the grocery store right away? You can plan ahead and make the trip to pick up dry cleaning and return the Amazon package. You can avoid having to retrace your steps later by combining multiple tasks in one trip. This may seem simple but it can help you save fuel.
Use membership club when it matters the most
Kiehl believes it is counterintuitive to spend money on a warehouse club membership at Costco or BJ’s, but that the gas savings can be well worth it, especially if your goal is to shop for other goods. His family saved around 20 cents per gallon last summer, he said.
Safeway and Kroger, two of the most popular grocery stores chains, have fuel stations at certain locations. Here you can cash in on any points you earn for food shopping. Kroger’s points can also be used at Shell stations that are participating. This is where the key is to save fuel so that you get the best per-gallon discount.
Before you create a budget
NerdWallet shows you how to cut down on your spending and show you how to save.
Find gas prices for where you are going
Stop passively passing gas stations. It’s a good idea to pay attention to prices posted on signs. To avoid any unexpected increases, make sure you fill up immediately if you find a great deal.
To check the prices of stations before you drive, you can also use an app like GasBuddy and even Google Maps. Driving across state lines or between cities? Find out the gas prices in your area and where you plan to go. Next, find the lowest price gas station.
A gas credit card, which pays a percentage of fuel purchases, may be an option for gig workers and other frequent drivers.
Request a break from your commute
Staying off the roads can lead to the greatest savings. The demand for work-from home jobs has significantly increased in recent years. It may be time for some flexibility if remote work is a good fit for your job.
“If this is not something that has been discussed with the company,” states Kiehl.
An employer should be open to working with you to reduce the commute time.