Saving money on gas in Canada
The skyrocketing price of gas in Canada is causing a lot of worry. Gas prices impact many areas of our economy from the cost of groceries through to cost of your daily commute to work. So, what we pay at the pump causes price increases in other goods and services.
At this time of writing this article, gas prices in Metro Vancouver are at $2.16/litre for 87 octane. That’s well into eyebrow raising territory.
Saving money on gas is both an art and a science. We all have our different ideas and ways of balancing the convenience of a car with family/work/life requirements. In this article, we suggest 10 great ways to help you save more money on gas because life should cost less.
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Statistics on Canadian car ownership
Why is fuel in Canada so expensive?
Did you know that there are 96 “brands’ of gas in Canada?
According to National Resources Canada, fuel prices in Canada vary depending on where you live. Federal, provincial, and municipal taxes, as well as federal fuel charges, levies, and excises add up to approximately 50% of the cost you pay at the pump.
Interesting facts about Canadian gas
- It’s hard to know who the owner of your. local gas stations are. Over 38% of gas stations in Canada operate under a brand owned by their supplier which is often a refiner like Shell or Esso
- 47% of Canada’s 11,908 gas stations control their own prices.
- 53% of Canada’s gas station prices are controlled by corporations
- Retailing gas often doesn’t cover the operating costs. So, gas stations often rely on convenience stores, car washes, and other facilities to remain profitable.
- The impacts of COVID-19 travel restrictions and work from home mandates reduced gas usage in Canada by 15.8%
Why do gas prices go up and how do gas stations set prices?
The price we pay at the pump in Canada is mainly affected by crude oil prices and the level of gasoline supply relative to gasoline demand. In other words, market conditions include where we get our gasoline from, and the stocks Canadian gas retailers have ready to sell influence what we pay at the pump.
With staff getting ready to go back into the office, the pre-Covid decline in gas usage adds to the many reasons that gas prices are rising.
How do gas stations set prices?
There are 4 main elements that make up the cost of gasoline in Canada:
- Crude oil prices: As a commodity that trades in world markets, the price of a barrel of crude oil fluctuates. Global economic conditions, geopolitical or military events, and other factors can all affect the price.
- Wholesale prices: This is the cost of refining crude oil into gasoline ready for filling your tank. World events such as refinery incidents, extreme weather events, or changes in demand influence this price.
- Retail mark-up: most retailers are independent business owners, so they are able to set their own margins, but the retail price still tends to fluctuate along with wholesale prices. However, the retail margin is generally very tight.
- Taxes: Account for an average across Canada of 42 cents per litre at the pump. These taxes include federal and provincial taxes, and some municipalities charge an additional local tax. Gas prices at the pump are typically lower in the US because of different taxation rates.
How much tax do you pay on gas in Canada?
Understand your needs and mileage
Saving money on gas effectively requires an understanding of your driving habits, consumption, and regular routes. When you know how much your daily commute costs in gas, as an example, you can compare other transportation options that are available to you.
How to calculate your gas mileage
Many modern cars calculate gas mileage automatically through a rolling average. However, it can be hard to understand your overall mileage per tank.
What you need:
Record your odometer reading before you fill up your tank.
Record it again when you fill up next.
Look at your gas receipt and see how many litres you used to fill your tank.
- Calculate your mileage
Understand impact of different fuel products + octanes
When you understand more about your mileage, you can also test the results of different fuel octanes and products to know what works best for your car. This is especially effective if you drive regular routes.
10 ways you can save money on gas in Canada
Go easy on the pedal
Accelerating quickly uses a lot more fuel. If your driving style is best described as “I drive it like I stole it”, it’s worth slowing down and channeling your inner “Miss Daisy”.
Some ways you can go easy on the pedal are:
- Not speeding up to red lights
- Not stepping on the gas when you’re in a traffic jam to close the gap between cars
- Accelerate slower out of a turn
It can be hard if your song comes on to keep a steady pace. Realistically, everyone’s driving style is a little different. but, if you can slow down and even out how you drive, you can increase fuel efficiency. The small savings will add up.
Leverage loyalty programs
Each service station has partnerships with different financial institutions and retailers to offer additional discounts, bonus cash back or loyalty points.
Loyalty program hacks to save on gas in Canada
- Redeem 20,000 Petro Points for a Fuel Savings Reward card and use it when paying with a linked RBC card, you can save 13 cents per litre* on your first 200 litres of fuel
- Esso™ + Mobil™ gas stations partner with PC Optimum points. You can redeem 4,000 PC Optimum points for 10c off per litre. Keep a look out for 20x points days at Shoppers and convert those points to savings at the pump
- If you have a CIBC Costco Mastercard, you can get 3% cash back at petrol from Costco
Switch to public transit or car share
It is obvious that you can save money on gas in Canada by using public transit. But, what you might not have thought of: Car share.
So, your transportation options are: bikes/scooters, public transit, carshare, carpool or drive yourself.
The most efficient option depends on time, cost, accessibility, and convenience. Car share programs can be very cost-effective as they are commonly electric or hybrid cars.
For example: driving an Evo car from North Vancouver into Vancouver’s downtown costs less than $10 but takes 20 minutes. You don’t have to pay for parking either so that’s almost door-to-door. A day pass on transit costs $12.70 for an adult but it takes around 30 minutes each way, and you might need to walk a fair way.
Do essential car maintenance
Keeping your car in good condition helps save money on gas. In fact, there are a few minor things that make a big difference:
- Tire Pressure: Make sure your tire pressure is within the recommended range. You can find that on your tires.
- Have the right kind of tires for the conditions
- Top up fluids like engine oil in between regular servicing
Fill up your tank at night time
This tip was crowdsourced from our Vancouver team. Some folks swear that if you fill your car up at night time the prices. are cheaper than they are during the day.
It’s worth a try anyway!
Carpool with colleagues
If you’re all on your way back into the office, it can make sense to carpool. That way, you can split the cost of gas and don’t sacrifice convenience.
Check traffic religiously
Always check the traffic before you leave. Checking the traffic helps save money on gas because you can avoid traffic jams, road incidents, and so on that can cause you to get stuck idling your car for hours at a time.
It all adds up to savings!
Use apps to find cheap fuel near you
There are a few apps around that track fuel prices. In North America, one. of the most popular is Gas Buddy. With it, you can plan your trips to stop at the cheapest gas stations, find a gas station with the cheapest fuel near you, and a few more neat tricks.
Buy a cheaper car
If you’re in the position to buy a more efficient car, or even a hybrid or fully electric car, it can add up. Before you buy, read the the Natural Resources Canada fuel consumption guide.
Both provincial and federal governments offer additional grants and tax incentives to purchase electric cars which is also worth looking into to reduce the cost.
Finding cheap gas and stacking savings
Saving money is easier when you put in place strategies to design your life around your goals. Making small changes and thinking about your driving habits means you can save more money on fuel and stretch your income further. It all adds up!