The cost of fuel is rising again and just went over $3.00 per gallon. I can remember when I was in the army, I could buy gas on the base at $.25 per gallon. Oh, for those days again! The rising costs sure keep us looking for ways to reduce our fuel consumption and get the best cost per mile.
At the university, I teach a course in Managerial Accounting. At the beginning of the course, I ask students if they would like to participate in an experiment. The students who volunteer are asked to purchase medium grade fuel (89 octane) for their vehicles instead of regular gas (87 octane). Typically, the fuel costs $.10 more per gallon. They are required to keep track of their fuel consumption to see if the higher octane gives them better mileage and whether the improved mileage more than offsets the additional cost per gallon. Surprisingly, most students have found that they save money by purchasing the higher octane fuel. Authorities say that is hogwash, that the higher octane does not provide greater fuel efficiency. They argue that the higher octane only works better for 12-cylinder racing cars that are engineered to take advantage of the higher octane. They also say that the higher octane fuel in cars not made to use it dirties up the air pollution filters on the vehicle and makes the vehicle perform less efficiently. I guess I will have to stop having students experiment with fuel during the course.
What about the new FFVs (Flex Fuel Vehicles)? Flex fuel vehicles can take either Ethanol (alcohol-based fuel) or regular gas (petroleum-based fuel). Ethanol fuel is priced lower than regular gas. The alcohol-based fuel burns cleaner and is better for the environment. It also reduces our reliance on petroleum from foreign sources. The Ethanol fuel is made from corn. So it provides an additional market for our farming communities. However, it can be difficult to find service stations that carry the Ethanol fuel. The downside to the alcohol-based fuel is that you will use 1.39 gallons of Ethanol compared to 1 gallon of petroleum to go the same distance. This drop in efficiency can make it more expensive to use the alternative fuel. Right now, we are in a transition period and the autos have to be designed to accommodate both fuels. Future vehicles may become available that only use Ethanol, and the fuel efficiency may improve. So, my lesson learned here is: Use regular unleaded gas (87 octane) and drive autos that get good mileage! (Now I need to come up with another “cost saving” experiment for my students.)
Keep those letters coming, folks. Send your ideas to: The Frugal Forum, P.O. Box 693, Huntley, IL 60142 or by email to: thefrugalforum@gmail.com.
