On March 22, 2022, I set out to get a few groceries at my nearby grocery store. I also needed to fill my car with gas. The grocery store has a gas station on the lot, which showed a price of 169.9. The price of gas had been rising, and more than ever, I was conscious about getting the best price. I checked the Gas Buddy app to see what the price was at my local costco, about 7km away. Their price was 161.9. For eight cents, I decided to make the drive. I filled 47.64 litres, costing $77.13. I burned about an extra litre of gas driving to costco and then back home, as opposed to simply filling up on the grocery lot. However, filling 46.64 litres at 169.9 would cost $79.25, just over $2 more. So despite the extra gas burn, it was definitely worth it to go to Costco. Whether it’s worth your time or not is a personal judgement, but as a student in London with not much better to do that night, I thought it was worth my while.
The big problem here is that in a country where the government claims it is no longer free to pollute, I was provided with financial incentive to do so. Every litre of gas burned releases about 2kg of CO2. For this one time, it’s not a big deal. However, the average Ontarian will fill their car about 24 times a year. There are roughly 9 million registered light vehicles in Ontario. If we all make the same trip I did, we would unnecessarily release 432 million kgs of CO2 annually. This is back of the napkin math, but it demonstrates the potential scale of the issue. Once again using the NRCan data linked above, that’s equivalent to about 94,000 cars yearly emissions.
I wanted to get a bit more precise, so I created a simulation in Python to better understand the dynamics here. The simulation simulates cars filling up from random points in London. It places the car at a random location in London, and uses the openrouteservice to determine distances to all gas stations in the city. This, combined with their price which I got from GasBuddy, determines the cost of getting gas at each station. This simulation only covers the London area. Dynamics may be somewhat different across Ontario and thus numbers should be extrapolated with caution. 4 types of vehicles are possible in the simulation, and are assigned fuel economy and tank size from popular models.
The simulation also makes a few assumptions:
- That consumers are aware of gas prices at all stations near them. These days, this information is pretty easy to find using GasBuddy or Google Maps. Consumers can also generally get a feel for which stations are regularly “cheap” or “expensive” over time by driving around.
- That consumers are willing to drive any distance to save any amount of money on gas. This probably isn’t true, but difficult to know how far someone would drive to save a certain amount on gas.
- That consumers will always choose between the nearest station or the cheapest station (after factoring in fuel cost), and will always choose the cheapest station. The nearest station will only be chosen if it is also the cheapest.
- That consumers must pay the display price. This is again not necessarily true, as some may get a rebate in the form of rewards. A bit difficult to calculate for all stations though, so we’ll work with the display price. Generally rewards are not given in cash anyway.
- That the consumer is leaving their current location to go directly to the gas station and returning directly to their previous location after purchasing gas.
- The consumer must also pay extra for return fuel if they go to a further station, but that fuel would be at the same price as their current fill. This usually isn’t true but no way to know how much the consumer will pay for gas at the next fill.
- Drivers have their tanks 20% full when they seek a fuel station.
- Drivers all use regular fuel. Of course premium is used by some drivers in real life, but for this simulation I have simplified things and used regular prices/burn rates for everything.
I will start with the base results of the simulation. In this base run, I ran the simulation 10,000 times (10,000 fill-ups from random locations in London, Ontario). All stations are available to all users, except for Costco which is only available to roughly 50% of drivers (there is a 50% chance the driver is a Costco member). If the user is not a costco member, that is removed from the list of available stations.
For 10,000 fill-ups, the results are as follows:
Total additional fuel burned: 4848 L (about .48 L per driver).
Total money saved: $12348.45 (about $1.23 per driver).
A lower priced station would be optimal for 77.3% of drivers. 36% of drivers filled up at Costco.
I estimate that there are about 6.55 million light vehicle fill-ups annually in London, Ontario. This number assumes that the light vehicle population is distributed the same as the human population. While this is likely not a perfect approximation, it is likely close. This would mean that, on average annually:
3.1 million litres of fuel are wasted annually filling up for cheap in London. That’s a lot of fuel! This wastage saves consumers about 8 million dollars. If we expand these results to the rest of Ontario, which should be done with caution as dynamics may vary across the province, we arrive at a fuel wastage annually of 106 million litres. This is actually just under half of what our back of the napkin math stated earlier, but not an insignificant number.
What if we just got rid of Costco gas?
It’s an interesting solution. It’s clear that Costco appears to be responsible for much of this issue. This is also a potential solution that could be taken by municipalities rather than the province. Municipalities can prevent more Costco gas stations from being built in their communities. Regulation of gas prices would require provincial cooperation. Let’s remove the Costco station in London and see what happens.
For every 10,000 fill-ups, the results are as follows:
Total additional fuel burned: 2761 L (about .27 L per driver).
Total money saved: $7880.26 (about $0.79 per driver).
A lower priced station would be optimal for 69% of drivers.
A reduction in fuel wastage by about 56%! This is a promising solution, and shows how environmentally damaging Costco gas can be. I would encourage any municipality or other authority faced with the decision of approving development of a Costco gas station to carefully consider the environmental risk.
Savings here are also looking dim. I wouldn’t expect too many drivers to find $0.79 worth their time, so the reduction in fuel wastage by getting rid of Costco may be even larger than demonstrated.
What happens as the number of gas stations dwindles?
It’s pretty clear at this point that ICE vehicles will gradually be replaced with electric vehicles. As this happens, I would expect the number of gas stations in each community to gradually diminish as the demand for fuel decreases. How would this impact the results of our simulation? Consumers would fill vehicles less often per year, but would this benefit be partially cancelled by more fuel shopping? In contrast, would fuel shopping be eliminated?
Let’s check by simply removing half the stations! We’ll keep Costco gas out of this for now.
Here are the results, for every 10,000 fill-ups:
Total additional fuel burned: 3012 L (about 0.3 L per driver).
Total money saved: $4432.12 (about $0.40 per driver).
Interesting results. Drivers are saving less, but on average would waste more fuel if they still want to save this small amount of money. This generally indicates that dwindling stations won’t help the problem on a per-fill-up basis, although the overall fuel wastage would still reduce as their are fewer fill-ups annually.
The results of the simulation support the regulation of fuel prices in order to reduce fuel wastage in Ontario. If prices did not differ between stations, Ontario’s fuel consumption could be reduced by possibly up to 100 million litres of fuel per year. The five eastern-most provinces already regulate the price of fuel. This is not a far-fetched or unrealistic policy proposal, and was proposed during the most recent election campaign by the NDP. However, it appears to have been proposed to create fairness rather than eliminate cruising for gas.
Reducing fuel consumption by 100 million litres a year won’t solve climate change by itself. However, implementation of fuel price regulation is a quick win which could save emissions equivalent to about 50,000 cars. Building new infrastructure takes time. Electric vehicles are difficult for consumers to get their hands on, and very costly at the moment. What’s standing in the way of fuel price regulation? There’s no reason for the provincial government not to act now.
Source code and sources
In additional to some of the sources I have linked above, other sources used for the simulation are available in an Excel file which is in the git repository with the source code. You can find the source code here.