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You can still find ‘cheap’ gas — if you know where to look

By Chris Isidore, CNN Business

The US average price of gas now stands at a record $4.17 a gallon. But gas for less than $4 a gallon can still be found at tens of thousands of service stations across much of the country.

The data show that there’s a wide range of pricing in most markets, even in many of the states where the average price is now well above $4.

Most stations try to stay just below that mark, even if that means charging $3.999, which is the most common price for a gallon of regular gas at US stations Tuesday, according to the Oil Price Information Service, which tracks prices for AAA.

Nearly 60,000 stations nationwide, or roughly 42%, have managed to keep their prices below the $4 a gallon mark, with about 9,000 of those stations selling gas for less than $3.75 a gallon.

Most stations with much cheaper gas are located in a wide swath in the center of the country, from North Dakota down to Texas, where no states have average prices above $3.85.

But cheaper gas can still be found even in some of the higher priced states for those willing to look for it.

OPIS data shows 3% of stations in Nevada are charging less than $4, even though the average price there of $4.67 a gallon makes it the third most expensive state in the country — behind only California and Hawaii.

That same low percentage of stations in Illinois, with its $4.43 per gallon average, have gas that’s cheaper than $4, while about 9% of Vermont stations are below the benchmark, even though the average there is $4.18. In Virginia, where the statewide average is $4.10, one station in four charges less than $4.

The average price, both nationally and within each state, can be distorted by stations with significantly higher prices, even if those dealers pump far less gasoline than the lower priced stations.

It’s not uncommon to find small, independently owned stations that sell a relatively limited amount of gas at prices above the local average, said Patrick De Haan, head of petroleum analysis for GasBuddy, an app that lets drivers search for stations based on prices.

“I sit here myself and scratch my head,” De Haan said. “Instead of having a lower price and more volume, they’re content with making more on each sale. They generally have customers who might not be price sensitive.”

But a smaller independent gas station might sell only 80,000 gallons a month, or less. A single Costco or Sam’s Club could pump 10 times that much or more, said Tom Kloza, global head of energy analysis at OPIS.

And beyond the advantages that big retailers such as Costco or Sam’s Club might have luring shoppers with low gas prices, they generally make money on gas sales even if they charge 30 cents a gallon less than the local market. Last week Costco CFO Richard Galanti told analysts that its gasoline margins are up with the recent rise in prices, and now accounts for about $20 billion in Costco’s annual sales.

Drivers become more price conscious when gas prices go up, of course. They might sit in their cars for 30 minutes to buy cheap gas at Costco, even if saving 30 cents a gallon saves them only $5 if they’re buying about 16 gallons.

“People don’t think about what their time is worth. That’s the grip that low prices can have over someone,” De Haan said.

The national average is also somewhat distorted by prices in California, which has a statewide average of $5.44 a gallon due to tougher environmental regulations as well as retail and wholesale gas taxes and fees that are much higher than anywhere else in the country.

California has about 9,400 gas stations. The national average would be about 10 cents a gallon lower than the current price of $4.17 if the Golden State’s stations were excluded from the calculation.

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