Sylvie Willis
Starting a gas station is a costly endeavour, with expenses ranging from $250,000 to $5,000,000 or more, depending on various factors. The cost of land is a significant factor, with prices ranging from $50,000 to $1,000,000 or more, depending on location and size. High-traffic areas tend to be more expensive but offer greater revenue potential. Leasing land can reduce initial investment but increases operational costs over time. Other crucial expenses include marketing, staffing, utilities, licensing, and insurance. Gas stations often generate profits from additional services like convenience stores, car washes, and motels, rather than fuel sales alone.
| Characteristics | Values |
|---|---|
| Average price of gas in the U.S. | $3.15 per gallon |
| Average price of gas in the U.S. one year ago | $3.51 per gallon |
| Average price of gas in 2024 | $0.20 less per gallon than in 2023 |
| EIA-projected average price of gas in 2025 | $3.20 per gallon |
| EIA-projected average price of Brent crude oil in 2025 | $74 per barrel |
| Average price of Brent crude oil in 2024 | $80 per barrel |
| Day of the week with the cheapest gas prices | Monday |
| Days of the week with the most expensive gas prices | Friday and Saturday |
| Redemption value when purchasing gas at a Kroger gas station | 1,000 Fuel Points for $1 off per gallon |
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What You'll Learn
- Average gas prices in the US are $3.15 per gallon
- Gas prices are 20 cents less per gallon in 2024 than 2023
- Gas is cheapest on Mondays, most expensive on Fridays and Saturdays
- Using a cash-back credit card can maximise savings
- The global consumption of liquid fuels is projected to increase by 1.3 million barrels per day in 2025
Average gas prices in the US are $3.15 per gallon
The average price of gasoline in the US is currently $3.15 per gallon, with premium gasoline costing on average $3.98 per gallon. This price has increased by 1.8% since December 2024, and it is 18.7% higher than the price in January 2020, at the beginning of the pandemic.
The price of gasoline in the US has fluctuated over the past decade. In 2012, the price peaked at $3.62 per gallon, and although it dipped in 2013, it remained above $3 per gallon throughout 2014. In 2015, the price of crude oil fell, and the price of gasoline dropped to $2.43, falling further to a record low of $2.14 in 2016. Prices began to recover in 2017, and in 2022, the conflict between Russia and Ukraine caused further volatility in the market, with Western countries imposing sanctions on Russia, a major trade partner for US petroleum imports.
The price of gasoline varies across the US, with state-wide prices influenced by factors such as taxes, transportation costs, supply chains, and local regulations. States with higher fuel taxes or limited access to refineries tend to have higher prices, while those with lower taxes or a more abundant local supply often have cheaper rates.
Experts predict that gas prices may increase further if a new 10% tariff on Canadian energy imports to the US is enacted. The impact on consumer prices will depend on how Canadian producers and US refiners respond, but a 10% tariff passed on to the consumer could increase fuel prices by about 15 cents per gallon.
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Gas prices are 20 cents less per gallon in 2024 than 2023
Gas prices in the United States witnessed a significant decrease in 2024, with prices approximately 20 cents lower per gallon compared to 2023. This reduction provided much-needed relief to consumers, who had previously endured sharp increases in gasoline prices in 2022, which peaked in September 2023.
The average retail price for regular gasoline in 2024 was $3.30 per gallon, a decrease of $0.21 per gallon from 2023. This price reduction was influenced by two key factors: lower crude oil prices and narrower refinery margins. The decrease in crude oil prices was a significant contributor, as they constitute the largest component of U.S. gasoline prices.
Throughout 2024, gasoline prices fluctuated, reaching their highest point in late April at $3.67 per gallon. However, this price was still lower than the previous year's high of $3.88 per gallon in September. The summer driving season, which typically sees peak gasoline usage, was preceded by these higher prices. Yet, the overall trend in 2024 reflected relatively lower prices for gasoline and other petroleum products.
Regional variations in gasoline prices were also evident, with the annual average ranging from a low of $2.89/gal in the U.S. Gulf Coast region to a high of $4.18/gal on the West Coast. The largest decrease was observed in the Rocky Mountains, with prices dropping by $0.42/gal compared to 2023. Additionally, gasoline demand during the summer of 2024 was weaker than in 2023, contributing to building inventories across the country.
The decrease in gasoline prices in 2024 provided a welcome break for consumers, especially considering the previous year's high prices. The combination of lower crude oil prices and reduced demand played a pivotal role in driving down gasoline prices across the United States.
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Gas is cheapest on Mondays, most expensive on Fridays and Saturdays
The price of gas varies depending on the day of the week. Gas is typically cheapest on Mondays, with prices rising as the week goes on. This is because demand is lower at the beginning of the week, as many people fill up their tanks over the weekend.
According to GasBuddy's lead petroleum analyst, Patrick De Haan, "energy markets are closed over the weekend, but they're open Monday through Friday. By the time the weekend rolls around, [gas stations] may be passing around any increases that happened earlier in the week." De Haan also notes that a key government report is released every Wednesday, which can influence the wholesale price of oil and, subsequently, gas prices.
Research from GasBuddy and other sources supports the idea that Mondays offer the lowest average gas prices in most areas of the United States. This is followed by Tuesdays and Fridays, which are also considered favourable days to fill up.
On the other hand, Thursdays tend to be the most expensive day to purchase gas, with Wednesdays being the second most expensive. This is likely because gas stations anticipate higher demand during the weekend and are less likely to lower their prices.
Finally, Saturdays and, to a lesser extent, Sundays are also costly, as they are popular days for refuelling, leading to increased demand and, consequently, higher prices.
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Using a cash-back credit card can maximise savings
The cost of running a gas station varies depending on several factors, and it is challenging to provide a definitive range without specific details and context. However, when it comes to maximising savings at gas stations, using a cash-back credit card can be a strategic move. Here are some insights into how a cash-back credit card can enhance your savings:
Convenience and Accessibility
The ability to obtain cash back when making a credit card purchase at a gas station offers convenience and accessibility. This feature is similar to what you might find at grocery or retail stores, providing you with the flexibility to get cash without incurring ATM fees. This is especially beneficial in areas where gas stations offering cash back are more prevalent than ATMs, saving you time and effort.
Security and Protection
Using a cash-back credit card at a gas station can help reduce the risk of ATM skimming, a fraudulent practice where criminals attach devices to steal card information. Visa reported a significant increase in card-skimming incidents at fuel pumps in 2019. By opting for a cash-back transaction, you minimise the exposure of your card details at ATMs and reduce the risk of theft or loss associated with carrying large amounts of cash.
Rewards and Cash Back Rates
Some credit cards offer attractive cash-back rates specifically for gas station purchases, including fuel, snacks, and even gift cards. For example, the Discover it® Cash Back card can earn you 5% back on up to $1,500 in purchases each quarter when gas stations are a bonus category. This can result in significant savings over time, especially if you frequently use your card for gas purchases.
Card Selection and Optimisation
To maximise savings, it's important to select the right cash-back credit card that aligns with your spending habits. While some cards offer a flat rate of cash back on all purchases, others provide higher rewards rates for specific categories, including gas stations. By choosing a card with a higher rewards rate for gas purchases, you can amplify your savings. Additionally, consider cards that offer sign-up bonuses or introductory periods with elevated cash-back rates to further boost your savings potential.
Understanding Limitations and Policies
It's essential to recognise that not all gas stations offer cash-back services, and there may be limitations and fees associated with those that do. Smaller or independently owned stations may not provide cash-back options. Before assuming the availability of cash back, it's advisable to familiarise yourself with the policies and regulations of the specific gas station and your credit card issuer. Understanding these nuances will help you make informed decisions and maximise your savings opportunities.
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The global consumption of liquid fuels is projected to increase by 1.3 million barrels per day in 2025
The cost of opening a gas station varies depending on several factors. The most significant expense is often the cost of acquiring land, which can range from \$50,000 to \$1 million or more, depending on the location and size of the gas station. Leasing land can reduce initial investment but will add to ongoing operational costs. High-traffic areas, which are more profitable, tend to be more expensive. Other factors that influence startup costs include construction costs, licensing and permitting requirements, payroll expenses, and initial marketing and promotion, which can cost between \$5,000 and \$20,000.
The global consumption of liquid fuels is expected to increase by 1.3 million barrels per day in 2025. This projection is based on several factors and trends in the energy industry. Firstly, global energy demand is expected to grow, with NOCs (National Oil Companies) supporting this growth. Secondly, there has been a recent emphasis on the supply security of strategic natural resources, which may lead to increased state purchases of crude oil and liquid fuels. For instance, China's monetary stimulus measures are expected to boost economic growth and petroleum consumption, with Chinese liquid fuel consumption projected to increase by 0.3 million barrels per day in 2025. India is also expected to increase its consumption of liquid fuels by 0.2 million barrels per day in 2025, driven by rising demand for transportation fuels.
While the global consumption of liquid fuels is projected to increase, it's important to note that there are also efforts to promote renewable energy and reduce the consumption of fossil fuels. For example, China has doubled its EV (electric vehicle) subsidy, aiming for EVs to account for 50% of new vehicle sales by 2025. India, while facing challenges in phasing out coal-based power plants, remains committed to renewable energy and is expected to accelerate its energy transition. Despite these efforts, the demand for road transportation fuels (gasoline and diesel) is projected to increase by 1% between 2024 and 2034, with 2025 expected to be a year of strong growth following worldwide monetary easing.
The projected increase in global liquid fuel consumption has implications for the oil and gas industry. Oilfield services have recently reported strong performance, and companies are investing in low-carbon technology projects to balance risks. While OPEC+ (Organization of the Petroleum Exporting Countries) has announced production increases, they are still expected to produce below the target path to limit increases in global oil inventories and support falling prices. The US, in particular, has prioritized capital discipline, digital transformation, and strategic acquisitions to grow profitably, resulting in a 7% rise in net income from 2014 to 2023 despite an 18% drop in oil prices.
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Frequently asked questions
The current average price of gas in the U.S. is $3.15 per gallon.
One year ago, the average price of gas was $3.51 per gallon.
According to a survey by GasBuddy, gas is the cheapest on Mondays, while Fridays and Saturdays are the most expensive.
There are a few strategies to save money when buying gas. You can use gas apps to find the cheapest gas in your area, or you can purchase gas at certain gas stations, such as Kroger, where you can redeem points for discounts. Additionally, using a cash-back credit card for gas purchases can also help maximize your savings.
