Cheap Fuel Doesn’t Cost Less

It’s something I notice more in the US than I did back home in the UK (though wasn’t completely missing from many Brits) – People paying more attention to the advertised price of fuel than to how much that particular fuel is costing them and going with what they perceive as the cheaper option.

If at this point you’re thinking “Huh?” then this post is for you.

You see, how much you spend on fuel is not just down to how much the fuel costs for the type you need (or purchasing, more on that in a moment) at your chosen garage (“gas station”). GBP1.35 per litre or $2.05 per US gallon from your local gulp ‘n’ blow isn’t necessarily going to be cheaper to run your car on than the extra 40p / $0.40 it would cost to get the proper gradeĀ  from the Shell / BP / Cenex.

But, James, how can cheap fuel cost more?

Glad you asked. It all comes down to the actual number of miles you can drive your car for a given volume of fuel. And this various considerably between different brands of fuel (“gas”).

Huh?

I’m not going to bore you with the science *applause* needless to say, I’ve performed many real world tests (as have some of my friends, Simon, I’m pointing at you) in both the UK and the US and the results are the same. A tank of cheaper yokel home brew petrol (gas) gets fewer mpg’s than the bigger named brands and then even between the different named brands there’s a difference. BP is the clear winner in both the UK and US as far as mpg’s, followed by Shell and Cenex here in the US. Our VW Passat does slightly better on the Cenex than Shell mpg wise though the truck definitely does better with Shell.

And the differences aren’t small either – between best and worse is as much as 20%. Throwing figures out there, if you spend $2.05 per (US) gallon but only get 27mpg then it’s costing you 7.6cents per mile. Compare that to the 33mpg from Shell, as long as the Shell gas was no more than $2.50, you’ll be better off.
To put it another way, at $2.50, a more than 20% increase in pump price, you’re paying the same per mile but using a better quality of fuel. And anything less than $2.50 (in this example) and you’re SAVING money. Where I live the price difference between low and high end for the same grade of fuel is less than 30 cents. It costs us less per mile to spend more per gallon.

But it’s not just about mpg’s

For example, Esso (Exxon in the US) is very clean burning, returns a good mpg but suffers with performance; It feels watered down; Vehicles seem to have a definite lack of oomph compared to some other fuels. Shell on the other hand is awesome for performance, great for the engine but lower mpg’s than Esso (these things are probably related). The middle ground is BP. In the US we can compare the likes of Cenex and Holiday and local brands like Stop’n’Go. Cenex seems to be the winner but still manages less mpg’s than BP and worse performance (“oomph”) than both Shell and BP. It’s all a compromise. Shell costs the most but we run our vehicles on it because 1. there isn’t a BP in this neck of the woods miles and miles of flat featureless, 2. because our car requires 91 grade, the truck 87 and the truck needs 100% petrol, not 10% ethanol and 3. the vehicles seem to prefer it from a gut feel point of view.

Ethanol

This wouldn’t be complete without talking about Ethanol in fuel.

The cheapest fuel you can buy here (of the main grades) is 87 with 10% ethanol. Many gas pumps even have signs indicating that it’s the “cheapest price”. Now there’s two things you need to bear in mind when it comes to ethanol added to the fuel (it can be in any grade of fuel, by the way so this applies to say, 91 too):

  1. Not all vehicles were built to run with ethanol fuels. Most cars built prior to around 2000 will have fuel lines that will be broken down by ethanol and worse, could in some cases actually harm the engine. Cars manufactured between 2000 and 2005 ish may have upgraded fuel lines but it’s still a potential issue. If your owners manual doesn’t say that ethanol “enhanced” fuels can be used, do NOT use them.
  2. This one goes back to my real world testing – Comparing fuels of the same grade and brand, the fuel with 10% ethanol, on older vehicles tested (pre-2010) had significantly lower mpg figures than the non-ethanol, by as much as 15%. In real world figures, 91 from the local Cenex (and by local, I mean the nearest Cenex that sells non-ethanol fuel because many don’t) for our Passat returns 34 mpg for non-ethanol and 29 with ethanol. The price difference is usually within 20cents so we save money spending more.

I haven’t had a chance to test this yet for vehicles made after 2010.

And Lastly, fuel grades.

Just because 87 is cheaper than 91 doesn’t mean you should be using it. Many cars are designed for a specific grade of fuel and using a lower grade than advised WILL harm the engine. And I hope I don’t need to tell you how much those bastids can cost.

Oh, and don’t even get me started with winter grade fuels!

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