GRAND RAPIDS, Mich. — Every time you fill up your tank in Michigan, the price per gallon tells a story far more complicated than the simple number on the pump. We'll break it down.
Gas prices are starting to inch back down in West Michigan right now, with an average price Tuesday of $3.03 per gallon.
You may see some stations below $3 right now, while others are up to $3.19. Patrick DeHaan with GasBuddy says drivers should definitely shop around for gas this week, as the price difference can be staggering.
"Some stations in West Michigan today all the way down to the $2.80s. You'll find some of those spread through Holland, Comstock Park, some stations in the $2.90s. The good news is prices should continue to trend a little bit lower this week after the big jump last week," he said.
You're likely spending over $40 every time you go to the pump right now. During the holiday season, that can be a financial strain on anyone. But how much of that is actually going toward your gas? We asked DeHaan.
"The price of oil generally is about 50% to 60% of what you're paying at the pump," he said.
Michigan is slightly above average when it comes to gasoline taxes, at 27 cents per gallon. On top of that, another 18.4 cents goes to the federal government. Then add in sales tax and credit card fees and the gas station making anywhere from 20 to 40 cents per gallon on your purchase.
Now, you're spending a total of 64 cents per gallon on just fees.
Let's put that into context. Say the average car holds 15 gallons of gas. If you're spending $3 per gallon (near Michigan's average right now), that's $45 total.
In Michigan, you're paying nearly $10 in fees every time you fill up. That's nearly a quarter of your purchase amount.
DeHaan says there is somewhat of a silver lining, though. Gas prices are expected to come down this week ahead of holiday travel.
"That's something that we call price cycling, where prices jump every seven to 12 days or so. But that also means that we could have another risk of seeing another hike, either late this week or early next week, just ahead of Christmas," DeHaan warns.
If that does happen, West Michigan would probably go back up to $3.09 or $3.19 per gallon on average, he estimates. Still, gas prices have come down substantially from this summer.
Price cycling includes these natural ebbs and flows because retailers try to compete aggressively, undercutting their competitors by shaving pennies off their prices. They do this until they make minimal or no profit, then raise their prices back to earn a bigger profit, which is when you see a big price hike at the pump.
The process starts all over again once a week or every two weeks.
Though a lot of people may be planning travel during the holiday season, DeHaan says this actually has little effect on gas prices.
"A lot of folks like to perpetuate the myth that demand skyrockets for gasoline because a lot of us do hit the road, but a lot of that is just in appearances. We all hit the road at the same time, going to the same place, but also, we also spend time away from school and work, and that leads to very low demand," he explained.
"In fact, the lowest daily demand of the year happens on Christmas because very few people are out driving around."
DeHaan predicts 2025 will be a fairly mild year for prices at the pump. That is, depending on what changes could come from a new administration.
"It's looking like a potential better year for motorists at the pump, although there are some risks," he said. "There's been talk of potential tariffs on Canadian products like oil. So there are some threats. There is a risk that gas prices could be a bit more volatile."
DeHaan encourages drivers to check GasBuddy, Waze or Google for gas prices before hitting the roads this holiday season.
If you're heading over state lines for your celebration, Indiana gas prices are similar to Michigan, Illinois' are more expensive and Ohio's are the cheapest.
