The local gaps [N Florida] have tended to be +30 for Plus, another +30 for Premium, if not more.
But that was back when regular was going for 2.59 or so.
FF to the massive drop in crude prices recently, leading to regular gas now approaching .99 cents in some places…and premium at these stations still has the same gaps, if not higher. I just checked northern Ohio [w/ Gasbuddy], where some stations are approaching the magic $1 level–and a number of premium prices there are well over $2.00.
So, why wouldn’t the gaps shrink as the price of regular drops? Lag because the premium in a station’s tanks was put in there a farther time in the past? Some other reason? Am I wrong in assuming that the markup works on a percentage basis? Local owners and regional managers lazy in making the appropriate adjustments?
Thankfully a local station 4 miles away has the smallest gaps in the county (for top tier), +20/+20. But a lot of stations which had relatively small gaps haven’t reverted back yet.
There is no reason the markup should be a constant percentage. One possible explanation in this particular case is that the cost of crude oil has fallen quite a bit, but the cost of the additives have not changed very much.
I recall one consumer advocate group (I think it was Consumer Reports) doing a study on variations in gas prices many years ago, correlating them with various external factors affecting the price of crude and especially price variations due to price wars among local gas stations. One of the things they explicitly noted was that no matter how much gas prices went up or down, or how much they were reduced due to local competition, the gap between regular and premium remained remarkably constant. This was many decades ago and it appears to be the same today. They attributed it to deliberate oil company policy.
For a long time it used to be $0.10 extra per grade (mid, high) no matter the price - it was strict, every station had that, then a run up in price ended that I believe in about 2002 and higher grades became much more expensive. The funny part is that part of that higher octane seemed to be coming from adding lower cost ethanol. The answer seemed to be to get people to spend as much as possible, same reason the airline seating pricing is what it is, and why BJ’s club send coupons instead of just discounting. Most cars need regular. People will pay for premium even if it does no good. And for those who need it, they knew what they were getting into when they bought the car.
Except that when I first bought my current model in 2006 (the 1st model year; 2nd car is same model, 2013 edition) the gaps were much smaller than they are now. Larger than they were a mere 2 years ago in point of fact. But like I said as long as that one local station continues their policy I’ll be ok.
As my mother once said “I’m old enough to remember when they charged you extra for lead added to your gas. Now they charge more for unleaded. The Rockefellers will always cheat you one way or another.”
The price gap you’re seeing is just one more illustration of this.
The roughly $0.10 difference between the grades lasted through the 2008 gas price spike, and even the dip and rebound through 2012. It was in 2013 that the price difference between regular and premium started to widen significantly.
The cause is attributed to different crude oil sources that are better suited to lower octane fuel production. Also there’s less demand for chemicals that used to be separated out for plastics production (such as naphtha), which are now being left in, except they also have lower octane levels. So it’s more expensive to get the octane boosters, and we’re already using the maximum amount of ethanol possible. Demand for high octane fuel has also gone up as higher compression turbocharged engines are becoming more prevalent, so the refineries just haven’t been able to keep up.
My last car (a 2002 VW Passat) required 91 octane for its naturally aspirated V6 engine (apparently it ran a pretty high compression ratio and high temperature). That always irritated me because I never found a gas station that sold 91 octane, though I heard they do exist. I’ve only ever seen regular at 87, mid-grade 89, and premium 93, so I usually just got premium.
Around here, the price difference between grades varies wildly between gas stations. It’s something I started paying attention to when I bought a car that required 91 octane. Where some stations might be one or two cents cheaper for regular gas, they might be as much as 60 cents more expensive for 91 octane. Here on the coast of Maine, we have a chain of stations called “Maritime Energy.” The difference between each grade is only 10¢ at their stations, so I pretty much get all my gas from them now. I just filled up for $2.039 per gallon.
Sunoco offers (or at least used to offer it). It is my understanding that they have 87 and 93 tanks and would mix them 1 part 87 to 2 parts 93 to give you 91.
In Australia, it’s 91,95,98. ( RON) instead of AKI (American octane index) Which makes me think that your VW Passat was specifying European octane numbers instead of American octane numbers.
I think that in Aus, that car was specified 95, because of our low-quality, high sulphur fuel, and I think that in Europe it was specified 91.
It’s not a loss leader, but the profit on it is almost nil. While higher octane has a bit better profit margin, most of the real profit comes from soda and snacks.
At least according to a friend of mine who used to own a gas station.
Note that when there is a price drop at the wholesale level, the gas stations still have to sell off the gas they bought at a higher price.
If they leave regular priced per their own old purchase price, they will lose business to stations who just got a load of the cheaper stuff. So they tend to pare that down a bit to keep up. They might lose money until they get the next load.
OTOH, premium takes a lot longer to sell off plus the people who buy it tend to not be so concerned about cost. So they leave that price higher for a bit or maybe even up it some to counteract the loss on the old higher priced regular they’re selling cheaper now.
(When wholesale prices go up, things are quite a bit different as all stations usually jack up the price right away regardless of the original cost of the on-hand stock.)
I know the owner of a mini-mart/gas station. He doesn’t care what the gasoline sells for, he makes pennies on the gallon. He changes the price of gas to match the place next door. Even when the price jumps and he makes a few more pennies per gallon for a while it doesn’t help because it cuts into customer’s purchases inside where he can make a real profit. Apparently cigarettes and lottery tickets are low margin for him also, the big moneymakers are soda, candy, chips, condoms, and little cigars used to roll blunts.
I didn’t see any post related to the gasoline “Shelf Life”
The link tells of some grades begin to go bad in as little as 3 months and others say 6 months.
Now my question is;
Dose the 90 and higher octane fuel (with exception to the 91 Non-Oxygenated) loose its volatile compounds as fast?
A couple years ago the fuel outlet that the company i drive bus for must have been unloading some old fuel blended in with their 87 octane because the bus I was driving was an older (2008) unit and we had to use the 87 per company rules(cost) to the point my older unit ran so poorly that I would add up to a 1/2 gal of isopropyl alcohol(per 60 gal) before the engine would run properly and the new buses wouldn’t have any serious issues with this same fuel. Then a couple months and that problem went away.
If what I thought was happening , we going to have some bad fuel at the pumps later this summer? :dubious: