2 days ago
Why Are So Many Consumers Fixated On Gas Prices?
Linnea Geiss, Chief Operating Officer at PDI Technologies.
Want to start a conversation where you'll get a strong opinion from almost everyone? Just ask them about gas prices. From small-town diners in rural America to the lead stories on the nightly news, any gas price fluctuations tend to stir the pot. Not only that, but those opinions tend to be disproportionately hot takes that don't seem to happen with other everyday aspects of our lives.
So, why does it feel like gas prices are such an obsession for so many of us? First, gas is a unique but frequent purchase. Consumers are bombarded by prominent outdoor pricing signage as they drive past gas stations.
There are a lot of reasons gas prices are such a hot topic, and three of the main reasons include:
1. Household Budgets: Many Americans view driving as a need, not a want. That makes gas an essential commodity rather than a discretionary purchase—especially for consumers on limited budgets, where gas costs can have a disproportionate impact.
2. Inflation: Higher gas prices can lead to higher inflation across the board since increased transportation costs get baked into all types of consumer goods and services.
3. Consumer Sentiment: People view the price of gas as a daily reminder of how expensive life is—and it has become a leading indicator of how consumers view the overall state of the economy.
Decoding The Gas Buyer's Mindset
For a country that has revolved around the automobile for almost a century, gas prices are part of American culture. When prices rise, they tend to bring an unwelcome reminder about economic loss (money that's leaving your wallet).
To put it more bluntly, you've probably heard hundreds of people complain about higher gas prices, but how many times have you heard someone singing the praises of oil companies when prices fall? I'm not even going to count the Covid-era price drops, since any good feelings got erased by the fact that most of us couldn't really go anywhere. Although for Summer 2025, we are forecasting the cheapest inflation-adjusted prices at the pump in several years, resulting in a robust road trip season for Americans.
Demystifying The Cost Of Gas
A key psychological factor stems from our economic expectations that any rise in price naturally feels like a big increase, even if it's relatively flat from a historical perspective. For example, inflation is a flashing red light for many consumers, and gas prices often get blamed as a prominent driver of inflation. In reality, gas prices haven't risen dramatically since 2008 in terms of today's dollars.
So, even if consumers feel that today's gas prices are way above average, they actually peaked over 15 years ago. Probably not what you were expecting, right?
Of course, none of us wants to pay more for something than we absolutely have to, which is why so many consumers have turned gas shopping into a game or challenge. This mindset appeals to both bargain hunters and people who simply want to be good stewards of their money.
These bargain hunters will sometimes go to extraordinary lengths to find a deal. I won't necessarily label it as irrational, but it seems like behavior more unique to this purchase than other kinds of savings consumers seek out. We all probably know someone who will gleefully drive an extra 10 miles to save a few pennies per gallon of gas, even if those additional driving miles effectively wipe out the savings. Why? It makes them feel like they're beating the system.
Even if it's not purely rational, the perception of value is real. Therefore, it's important to design pricing, offers and messaging to make customers feel like they're winning.
Taking The Shortcut To A Good Deal
That type of sentiment opens the door for savvy fuel retailers to attract cost-conscious shoppers. Entire books could be written about the calculations and formulas these retailers use to set just the right price to incentivize consumers, but that's another story for another day.
It's essential to note that the mobile phone is the primary driver of the modern gas buying experience, having completely transformed the game for bargain hunters. The digital experience enables the discovery and sharing of information about gas prices on a much larger scale, and in real time.
That's why so many consumers have embraced mobile apps and fuel rewards programs to save. I've seen firsthand how popular these money-saving tools have become. Apps like these empower communities to share, review and even compete. You can use these apps to turn your customers into marketers or data-gatherers.
The popularity of these apps (disclaimer: my company owns and operates one) stems from the community of bargain hunters who are sharing gas prices from across the U.S. There's a positive reinforcement of users helping each other find the best deals (making that grudge purchase a bit more palatable). And just like everyone loves a deal, they also love rewards.
Many app users have learned to double down by combining their savings with fuel rewards programs from participating coalition partners like grocery chains and travel companies. Doing so allows them to stack cents-off-per-gallon savings with additional everyday rewards—such as a free in-store coffee with every fuel fill-up.
It turns out that consumers love these types of programs, and the most innovative retailers are able to profit from them. Most of us wouldn't necessarily label bargain hunters as the most loyal customers, but once they buy into a retailer's loyalty and rewards program, they tend to keep showing up. And, as all retailers understand, a loyal customer is the best type of customer when it comes to selling more goods and increasing profitability.
These bargain hunters serve as a microcosm of the American consumer fixation on gas prices. But they also represent how retailers can deliver value to anyone who wants a good deal, especially when it comes to a "grudge" purchase like gasoline.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
