With gas prices on a non-fundamental (supply/demand) rise, people are looking for any way they can to save on gas. Well, have you ever wondered if the gas you're buying really is the cheapest available? Even if it is the lowest priced, it may not be the cheapest.

At my local gas stations, we normally have 3 different grades to choose from, 87 octane (Regular), 89 octane (Silver), and 91 octane (Premium). Usually, the Silver is cheapest because it is an Ethanol blend, the Regular is 10 cents higher, and the Premium is another 10 cents higher.

In theory, the octane rating has to do with the flash point of the fuel and should not really affect fuel economy. However, some claim that there IS a difference in fuel economy between the Regular and the Silver Ethanol blend. Some people claim they get 1-4 MPG better on Regular than on the Ethanol blend, and others say they saw no difference. The only way to find out for yourself would be to try a couple tanks of each and calculate your MPG.

So if you get better fuel economy on the more expensive gas, at what point does the more expensive gas become cheaper in the long run? Well that depends on how much better your fuel economy is, how many miles you drive, and what the gas prices are. If gas prices were $1.00 and $1.10 respectively, there would be little savings, but at $3.75 and $3.85, the savings could end up being substantial. There will also be more savings if you drive more miles.

To calculate savings, you need the following data:

- Number of miles you drive in a year
- The MPG you get with each type of fuel you are comparing (you will actually have to test this by filling up a couple times with each type and calculating your MPG)
- The current price of each gas type

To calculate the overall cost per year, use the following formula:

(Miles Per Year / MPG) * Price Per Gallon = Cost Per Year

So for example, if I drive 10000 miles per year and get 31 MPG with the Ethanol blend which is currently priced at $3.74 per gallon, my yearly cost would be:

(10000 / 31) * 3.74 = $1206.45

If I can get 34 MPG with Regular which is currently priced at $3.84 per gallon, my yearly cost would be:

(10000 / 34) * 3.84 = $1129.41

That's a yearly savings of $77.04 by buying the more expensive gas!

I have created a spreadsheet which you can use to help do these calculations and more. It will easily help you decide which gas is cheaper. Just download the file and fill in the cells colored yellow.

I hereby donate these files to the public domain so feel free to use them in any way you wish.

GasTypeCostComparison.ods - OpenOffice.org Spread Sheet (11KB)
GasTypeCostComparison.xls - MS Excel Spreadsheet (69KB)

I also wanted to mention that just because one gas is a little cheaper it doesn't mean that it would always be the best choice. Some people, like myself, like the fact that Ethanol burns cleaner and is a little better for the environment. Others believe that Ethanol puts too much stress on the food market. But that argument a subject for a another post.