Does higher-octane gas really cost more to produce, or is it priced higher simply because there is less demand for it? I’ve noticed (since I recently bought a car that needs 89 octane fuel) that while stations usually stay within a couple pennies of their neighbors on the 87 octane, the price of 89 octane can vary quite a bit more. In fact, I’ve found a station where the 89 is only a few cents more than the 87, making it much cheaper than the competion’s 89, even though the 87 is the same price at both stations.
Here’s a link to a somewhat technical article that undertakes to explain gasoline refining. It basically says that, yes, additional refining steps and/or additives are needed to boost octane, so there is at least some increase in production cost.