Save on Gas - buy fuel in bulk

You can save on gas in a big way if you buy your fuel in bulk. Relatively few of us can do it and enjoy the convenience of a gas station right at the house. See if saving 50 cents to $1 per gallon is worth the effort and expense of doing this.

The relative difficulty or cost of this tip is rated 1 to 10. A rating of 10 suggests that the tip is the most difficult or most costly. Expected savings are also rated 1 to 10. A rating of 10 suggests that the tip will provide substantial savings in fuel, money or both.

Buy Fuel in Bulk

Buying cheap gas is easy if you buy in bulk in January or February when it is at its lowest price. This is part of my approach to frugal living when it comes to the cost of fuel. It makes sense to me and is worth considering.

Gas prices go down during the winter and up during the summer. Whether you think it is price gouging or just supply and demand in action, it makes no difference. It is what it is.

Until you create marketplace alternatives, like making your own fuel, you're stuck with buying it from someone that does.

The point being, let’s not just complain about gas prices; let’s do something about them by trying to save on gas with bulk purchases in the off season.

Here is an example. In the winter of 2006 I purchased 1,000 gallons of mid-grade gasoline for $1.95 a gallon. In just a week or so, the price started to rise. After the price had gone about 25 cents a gallon higher than what I paid, I started using my fuel.

During that summer, we were seeing gas prices of $2.99 a gallon and higher, while I was using gas at $1 less per gallon.

2007 was similar. I saw the bottom of the market at about $2.87 a gallon for regular, so I ordered 250 gallons of mid-grade fuel at $2.91 a gallon. Only a few months later we were about $3.41 a gallon, and summer gas prices were closer to $4 per gallon.

While I used my personal supply of cheap gas, conveniently located at the house, I saved about 50 cents to 1 dollar per gallon.

So, the main benefits of having bulk fuel is to save on gas during the time of year when prices shoot through the roof, and the convenience of never having to stop at a local gas station. You save on gas and have the ultimate in convenience.

The Cost of Bulk Fuel

Buying in bulk has costs, but I think they are worth it. First, it's a big outlay of cash to buy fuel in bulk. Second, you have to purchase a storage tank (generally 300 to 500 gallon capacity), and a stand for gravity fed fuel delivery to your vehicle. They typically come as a set. Expect to pay $700 to $850 new, and $200 to $300 used.

The third consideration is when buying gas in bulk, you might want to stabilize the fuel to have it last those many months sitting in the storage tank. Fuel lasts a long time without stabilization, much longer with it.

Fourth, you need to put a good pressure/vacuum vent and seal on the tank to prevent loss through evaporation. This is essential. You can’t save on gas if you let it evaporate.

Fifth, your tank should be painted white to minimize heating from the sun that promotes evaporation. A sun shade over the top is even better, but not essential. Again, if you save on gas, you'll want to protect that gas from evaporation.

Lastly, there are maintenance issues that add costs. Filters should be replaced every few years, and hoses need to be replaced as the sun tends to rot them out.

I purchased two 500 gallon tanks used, so they cost about a third of what they would have cost new. My 300 gallon diesel tank was free for the taking at a local ranch that I was helping clean up. The stand needed repair, but that was simply a little welding and some scrap angle iron.

The savings in the cost of fuel during the first year paid for the tanks, new hoses and the filler vent pressure and vacuum seals. Since then I save on gas by using these resources to stock up when prices are low.

Risks and Limitations

There is risk of fire and loss of fuel in the event of a lightning strike or other accident or theft, so you have to consider that before jumping into this. My fuel tanks are each grounded, and they are situated away from the house and trees to minimize damage should they catch fire.

If your travels take you far away from home, the cheap gas sitting back home does you no good. You can only save on gas if much of your travels are local.

Note: There may be restrictions on having bulk fuel stored within city limits. I live in the county, so bulk fuel in above ground tanks is common.

Let's be Realistic

One last important note: Don’t think that having hundreds of gallons of fuel in storage is going to help you in the event of a shortage of fuel due to loss of electric power, oil embargo, terrorist attack or natural disaster. You might be able to run your generator longer than others, but that’s about it.

When electricity stops, the fuel pumps stop. When fuel runs out or the pumps stop, the trucks stop running, and when trucks stop running, everything comes to a standstill. Grocery stores are restocked continuously for a reason. If they weren’t, most food on the shelves would disappear within a few days.

So, save on gas by taking advantage of seasonal dips in the price, but don’t talk yourself into lots of cheap gas under the guise of having ample supplies of fuel for transportation to get groceries and other products. If fuel stops in this country for any reason, in less than a week there won’t be anything on the shelves to go get.

Cost or difficulty: 8
Savings: 10

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