Case Study: Going Out of Your Way to a Cheaper Gas Station

The follow-up article to our gassing up series discusses finding that station with cheap prices. Is it worth driving there to get a full tank?

Why are oil prices not the same?

One thing we all know is that oil prices vary, but we’re used to the big movements due to FOREX and what happens to oil-producing countries. We also have come to expect that diesel will be cheaper than unleaded gas. But, even across stations of the same company, the prices for a specific kind of gas will vary from place to place, sometimes even just because one is over a border. Here are some factors that lead to this:

  • Supply and supply considerations: this will include the world prices of oil, but I will also lump here the transportation. The farther you are to a depot, the higher your transportation costs will be.
  • Demand: There are many good examples, but here’s one a Redditor pointed out: two stations across another near the entrance-exit of an expressway had the one along the entrance have higher prices. This is because people will always want a full tank before a long road trip. Densely populated areas, think the metro will have high demand. While some companies will have blanket prices (taking out overhead costs), some independent stations can jack-up prices based on what they feel they can charge their consumers.
  • Taxes and government regulations: It’s also worth noting that in some cases (think how about how California has different requirements for their oil) you can have localized taxes and government regulations. In the Philippines however, oil is under a national law, so taxes are the same. There is the issue with some smuggled oil (which apparently happens in the Philippines), and when this is true, will lead to lower oil prices.

There are many other causes, another redditor even pointed price wars for adjacent stations, but regardless, there is potential in winning as a consumer given these price variances. It is funny, because oil does seem like the same product, and you could assume it can be priced the same. This is however not the case.


So is it worth to find that gas station with lower prices? As we’ll be doing let’s setup some assumptions for the comparison.

  • Every 2 Weeks full tank: We’ll be doing the comparison across a year with this assumption. This means you’re looking at 52.14/2 full tanks. To give more context, this works out to be a back-and-forth trip (assume your work commute) that is roughly crossing 1 to 2 cities in Manila.
  • Price of back and forth to an out-of-the-way station: Next we’ll assume an extra cost of driving out of your way to this gas station. This means that you can win if you find a gas station with low prices that is along one of your regular trips. We will peg this at ₱200 (as if you were to cross to another Metro Manila City).
  • 55-liter tank: We’ll assume the average tank size in our computations.
  • Prices: We assume ₱60 at your convenient gas station, and ₱55/ ₱50 at your out-of-the-way but cheaper station.


  • At your convenient gas station, this is ₱60 x 55 liters per full tank x 55.14/2 full tanks = ₱86,031 annually or ₱7,169.25 monthly.
  • At an out-of-the-way but station cheaper by ₱5, this (₱55 x 55 liters per full tank + ₱200 drive per full tank) x 55.14/2 full tanks = ₱84,075.75 annually, or ₱7,006.31 monthly
  • At an out-of-the-way but station cheaper by ₱10, this (₱60 x 55 liters per full tank + ₱200 drive per full tank) x 55.14/2 full tanks = ₱76,906.5 annually, or ₱6,408.88 monthly

Basta sa Bahay sees the first two case as more-or-less the same, that  ₱2k difference can be a convenience fee because you have to consider the time you drive to your out-of-way station. This means that it's only when you get a higher price differential, i.e., the  ₱10 difference that it starts to become worth it.

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