Friday, May 4, 2012

Paying for Cheap Gas

A few weeks ago, xkcd had the comic Working, which put to mind an app I need to develop or commission.

Whether it makes sense to drive out of your way to save on gas is more complicated than just the economic argument the xkcd comic puts forth in the image. The caption gets at the more interesting thing to me. When you drive farther, you are using up more (probably expensive) gas.

Let's take a simple example. You need 10 gallons of gas and have a gas station right on your way to work. But if you go 2 total miles out of your way (let's say it's a mile in the wrong direction), you could save 5 cents per gallon. Does it make sense to make the detour?

If your car gets 20 mpg in the type of driving you do for this detour, then you are using an extra 1/10 of a gallon to save 50 cents. If gas costs less than $5.00/gallon, then your detour makes sense (ignoring the cost of your time and the increased wear and tear and maintenance for your car).

Now, let's try another example. Let's stick with the 20 mpg because it's an easy number to work with and probably not too far off for many non-hybrid cars.

detour distance: 5 miles (1/4 of a gallon)
save per gallon: $0.10

This scenario makes sense if the cost per gallon is less than $4.00/gallon.

Now, let's look at a decision I get to make. These numbers represent the data for my nearest Costco gas station:

detour distance: 20 miles (1 gallon)
save per gallon: $0.14

This scenario makes sense if the cost per gallon is less than $1.40. Notice that this detour doesn't even make sense if you drive a car that gets 40 mpg.

Anyway, it amuses me that people start going out of their way to save money on gas when the cost of gas goes up, but when the cost of gas is high, the detours make less sense than they do when gas is cheaper. I need to write an app that doesn't just find cheap gas, but also allows you to put in your fuel efficiency and gallons needed to help you determine which cheap gas is worth the trip.

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