It staggers me sometimes to find out how much effort some people will put in to think they’re actually saving a few dollars.

Case in point: in an article in today’s Age (Hundreds queue for cut-price fuel), a petrol station dropped the price of petrol in McKinnon, a suburb here in Melbourne’s south-east, by 10 cents per litre.

It was reported that motorists came from as far away as Melbourne’s west — a 45 minute drive EACH WAY — to buy some of the fuel.

A “saving”?

Not in any way for this particular motorist.

According to Google maps, a trip from McKinnon to, say, Sunshine in Melbourne’s west, takes 34km and 47 minutes.

So a round trip is around 68km.

Let’s be generous here an assume the motorist is driving a reasonably fuel efficient 4 cylinder 2.0 litre powered car, such as a Ford Focus. According to online reviews, the Focus gets around 8.0 litres per 100km fuel efficiency.

So that 68km costs around 5.4 litres in fuel. Even at the discounted $1.497 price, that costs $8.

We’re not even taking into account here the 20 or 30 minutes the motorist probably sat idled waiting to fill up!

Even if we assume the driver let the 55 litre fuel tank run down to empty (improbable, given the risk of a 45 minute trip — but we’ll stay on the conservative side of this example), the $0.10 saving would save only $5.50 (absolute maximum).

So they’re AT LEAST $2.50 out of pocket just on recovering the cost of fuel in getting to the location!

We’ll forget about the car’s maintenance and running costs that would probably add a couple more dollars to the cost of the trip.

We can assume the driver avoids Melbourne’s tolled City Link, with a trip cost each way of $5.30 (from the Westgate freeway through the tunnel).

Now, on the matter of “time” spent on this saving. Let’s assume the driver had to wait only 10 minutes once they arrived in McKinnon (in actual fact probably a lot more, given the “chaos” this little saving caused and the “hundreds” that queued).

The time is around 1 hour and 40 minutes … let’s be ultra conservative, assume he drove straight in, filled up, paid and drove straight out in 5 minutes. The exercise probably took two hours, but we’ll stick with 1.75 hours to be generous to the driver in our calculation.

They’re already out of pocket, so what value do they put on their time?

According to the latest government info, the Full-time adult total earnings as of February 2008 was $1173.50.

If that accounts for 40 hours of work, then it equates to $29.3375 per hour … or $51.35 for 1.75 hours.

So … cost of fuel for the trip is $8, plus car running costs, plus over $51 in the value of the time … around $60 in total — to save, according to the article an average of $4 to $5.

The true cost of the trip is more than 10 TIMES higher than the saving!

The incredible lesson here is how much the “hip-pocket nerve” affects decision making — the “opportunity” to save $0.10 per litre was so overwhelmingly powerful that, at least in one case, it overtook the logic of accounting for the cost of taking up the opportunity.

An interesting behaviour to keep in mind, whether in politics or marketing.