The Green Routine

I learned the following money saving tip from a local gas tanker driver. Properly employed, this strategy will ensure you get the cheapest gas price possible.

Image courtesy of pierceplace532

According to the truck driver, there are some rules that gas stations must follow:

1. Gas stations can only raise pump prices after receiving a shipment of gasoline.

2. In most states, gas stations may only raise prices after 6pm.

3. The price the station pays for the gas is determined by the closing oil price of the previous day.

This driver’s money saving tip can easily be used to our advantage to get the cheapest gas price possible on any given day by checking the stock market before you leave work for the day.

The New York Stock Exchange (NYSE) closes at 4pm EST each day and is closed on weekends and US government holidays. So you’ll want to make your daily check after 4pm. The commodity you will want to check is the NYMEX Crude Future.

Due to the way gas prices at the pump are determined, they will not change on government holidays, nor will they change on the weekends. The price that is set on Friday night is the price that gas will remain throughout the weekend, until Monday after 6pm.

How to use this information to get the lowest possible gas price:

During your daily commute, make a mental note of gas prices. You might even consider keeping a log. Knowing the prices, and when local gas stations change them is key to employing this strategy. Generally speaking, higher volume gas stations will change prices more often - this is due to rule #1 - gas stations may only raise prices when receiving a new shipment of gas.

If the price of a barrel of crude is up significantly at the end of the day, you have until 6pm to buy your gas before the prices can be raised. In major metropolitan areas, gas stations generally receive at least one shipment per day - so you’ll need to act fast. In more rural areas, it might take a day or two for the prices to adjust to the market price.

If the price of a barrel of crude is down at the end of the day, you have from 6pm that day until 6pm the next day to lock in the low gas price. If you can wait until the next day to buy gas, you will maximize your savings by following the market. When the price is down, buy up all you can!