Wednesday, 30 May 2007

4 cents/litre or 8 cents/litre?

In Australia, some of the supermarkets gives a fuel voucher for a discount of $0.04 per litre at its affiliated service station. The two major affiliations are Coles with Shell and Safeway with Caltex. As our car has a tank capacity of 159 litres, we usually try use these vouchers as much as possible. To get the discount voucher, your grocery bill needs to be $30 or more for a single transaction. (I have seen shoppers separating their grocery purchases so that they can get more than one discount vouchers!)

I have always wondered if these vouchers actually save you any money?

Last night, I was filling up my 4wd at the local petrol station. This time, we haven't filled it for a couple of weeks and the tank is running quite low. With the price of diesel at about $1.24 per litre, it would cost $197.16 to fill the tank right up.

However, with the discount vouchers, there are several conditions.
  1. A single transaction can only be use for 150 litres of fuel.
  2. The voucher has a validity period, usually 1 month.
So with a saving of $0.04 per litre, the maximum discount I can get is $6..00, due to the 150 litres limit. What makes this discount rather unbearable is that the saving is not dependent upon the fuel price, so the higher the fuel price, the smaller percentage saving you will get.

So as I was filling up my 4wd last night, I noticed a sign at the bowser saying that if I spent $5 in -store, I get a further $0.04 per litre discount. This gives me a total discount of $0.08 per litre.

Working through the maths,

Maximum saving is 0.08 * 150 = $12.00
Purchase to get extra $0.04 discount = $5.00
Effective saving is 12.00 - 5 = $7.00

This is good news as it would be worthwhile for me to spend the extra $5 in-store to effectively gain an extra $1.00 saving.

However, if I spend more than $6.00 in-store, it would be better if I just stay at a discount rate of $0.04 per litre as my saving would start to diminished.

So I guess that next time I rush in-store and purchased a chocolate bar and a bottle of soft-drink for the extra discount, I need to be careful not to spend more than $6.00.

Around the net, I found the following resources for saving fuel on cars.


Tony said...

For me these vouchers aren't worth enough to justify the effort involved in using them.

My tank holds 40 litres so I could save $1.60 in a tankful.

But it's not that simple. The nearest outlet that does these discounts is 11km away. It's in another distributor pricing zone and usually charges 2c+ a litre more than my local stations.

And where I live petrol prices go up 10c a litre every wednesday regular as clockwork. So the greatest effect on price is choosing when to buy, then where. Factoring in these 2 elements the discount voucher's value ranges between -$4.80 and $1.60.

tehnyit said...

Tony, you are correct. In our usual circumstances, the amount of driving required just to get to the participating service station is enough to blow the savings away.

Overall, I have found the independent service station much more cheaper than the bigger service stations, even without the discount vouchers. Luckily, my local independent service station has a discount program with our local independent supermarket which will bring down the price even lower.

Ben said...

Where I Live there are five petrol stations that aren't more than three to four KM away, and their prices are usually within 1 to 2 cents of each other. The two stations that take supermarket vouchers are usually the cheapest ones. I always buy petrol during Tuesday as this is the bottom of the weekly pricing cycle. To fill up my car takes 35 litres at the most. This is a $1.20 saving at the time with the voucher.

My way of looking at the savings is what my cost would be if I bought petrol each week at the pricing peak with no vouchers and what my cost is buying the petrol at the pricing trough with a voucher.

Over a year, my savings are approximately $330.

The key is to always use the vouchers at the bottom of the pricing cycle.

tehnyit said...

Ben, that is a good point. Couple the fuel vouchers with the petrol price cycle to maximum effect.

Unfortunately, we only have a diesel car and its price cycle doesn't seem to be as volatile as that of petrol. It seems to stay at one price for weeks.

Louise said...

So far I have not used the vouchers. I need to look into it and see if it is worth it. I travel each week for work and the price of petrol is a lot cheaper the closer you get to sydney. Now if I can combine the trave with the vouchers it may be worthwhile. I need to do the math.