High spread between regular and premium grades
- Thread starter Quattro Pete
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Originally Posted By: Turk
The spread in MN is ~40-50 Cents a Gallon.
It used to be 14 Cents a Gallon 6 years ago.
That is way to much now & I would like to know the real reason it massively changed...
I think there's a nominal cost difference in actually processing higher octane fuel streams. It's also a math exercise to use up all the fuel produced because the refiner wants to sell it and because it's very expensive to just dump it as hazardous waste. I understand that a portion of the higher octane blendstocks actually goes into blending with lower octane blendstocks to be able to produce sale able regular unleaded. You can't sell the 84 octane stuff, but you can if you mix it with higher octane fuel to bring it up to 87.
In the end it's just a matter of the market. They'll set the prices at whatever level they want. It only costs pennies more per gallon to process a 91 octane fuel than 87 octane rating, but if they actually sold at a price it proportional to the refining costs, then who would buy regular. Higher octane rating are better for certain vehicles, so setting a price difference serves to extract a premium price for that fuel without lessening the demand for regular. Premium costs more at the pump because of marketing concerns. Now I can't explain the difference in spread. However, I understand that some areas with low demand for premium have 93 octane fairly common and considered premium. Around here 93 is "super premium" and generally blended from 100 octane racing unleaded.
The spread in MN is ~40-50 Cents a Gallon.
It used to be 14 Cents a Gallon 6 years ago.
That is way to much now & I would like to know the real reason it massively changed...
I think there's a nominal cost difference in actually processing higher octane fuel streams. It's also a math exercise to use up all the fuel produced because the refiner wants to sell it and because it's very expensive to just dump it as hazardous waste. I understand that a portion of the higher octane blendstocks actually goes into blending with lower octane blendstocks to be able to produce sale able regular unleaded. You can't sell the 84 octane stuff, but you can if you mix it with higher octane fuel to bring it up to 87.
In the end it's just a matter of the market. They'll set the prices at whatever level they want. It only costs pennies more per gallon to process a 91 octane fuel than 87 octane rating, but if they actually sold at a price it proportional to the refining costs, then who would buy regular. Higher octane rating are better for certain vehicles, so setting a price difference serves to extract a premium price for that fuel without lessening the demand for regular. Premium costs more at the pump because of marketing concerns. Now I can't explain the difference in spread. However, I understand that some areas with low demand for premium have 93 octane fairly common and considered premium. Around here 93 is "super premium" and generally blended from 100 octane racing unleaded.
wemay
Site Donor 2023
Regular - $2.19
Plus----- $2.37
Premium-$2.59
Pretty much all the stations around here.
Plus----- $2.37
Premium-$2.59
Pretty much all the stations around here.
Originally Posted By: Turk
The spread in MN is ~40-50 Cents a Gallon.
It used to be 14 Cents a Gallon 6 years ago.
That is way to much now & I would like to know the real reason it massively changed...
Most stations are independently owned/ran by individuals, they can set any price they want. If they think with a much higher price for premium they still can sell a reasonable volume to get good profit they will do it.
In some area the sale volume of premium is very low and maintenance cost is similar to higher volume regular therefore owner set the price accordingly.
The spread in MN is ~40-50 Cents a Gallon.
It used to be 14 Cents a Gallon 6 years ago.
That is way to much now & I would like to know the real reason it massively changed...
Most stations are independently owned/ran by individuals, they can set any price they want. If they think with a much higher price for premium they still can sell a reasonable volume to get good profit they will do it.
In some area the sale volume of premium is very low and maintenance cost is similar to higher volume regular therefore owner set the price accordingly.
in Michigan, most stations are 30 cents spread betweeen regular and premium . Except at shell where the spread is 60 cents. I am a Shell gas Premium user but 60 cents is rediculous Top Tier or no Top Tier. The reason is simple there are alot more 4 bangers on the road with High compression ratios. I drive 2 of them myself and while regular is indicated as acceptable, Premium really makes these cars have more Throttle response.
well, here in south ontario, the pump does not advertise the price of premium, motorist will have to pull into the pump station to find out the price. the spread is $.12-.15 per litre.
as for reason of spread, did pump drop the price on regular octane since more low octane were refine by SHALE sourced oil? or they only raise the price on high octane fuel? i think it's all about marketing; they don't sell at any price they want, but they sell at the price market can bear. unfortunately, gasoline is a life essential just like water and electricity in North America, so i guess they can charge anyway they want. what can we do if the pump showing $2/L or $6/Gallon? nothing really, and we can not build stash like motor oil...
as for reason of spread, did pump drop the price on regular octane since more low octane were refine by SHALE sourced oil? or they only raise the price on high octane fuel? i think it's all about marketing; they don't sell at any price they want, but they sell at the price market can bear. unfortunately, gasoline is a life essential just like water and electricity in North America, so i guess they can charge anyway they want. what can we do if the pump showing $2/L or $6/Gallon? nothing really, and we can not build stash like motor oil...
wemay
Site Donor 2023
Originally Posted By: 94 saturn sl1 2000 saturn sc2
there are alot more 4 bangers on the road with High compression ratios. I drive 2 of them myself and while regular is indicated as acceptable, Premium really makes these cars have more Throttle response.
Agreed, premium makes my 2.4 run better as well. Even though 87 'or above' is listed in the manual.
there are alot more 4 bangers on the road with High compression ratios. I drive 2 of them myself and while regular is indicated as acceptable, Premium really makes these cars have more Throttle response.
Agreed, premium makes my 2.4 run better as well. Even though 87 'or above' is listed in the manual.
Looks like the spread has dropped to about 25 cents now. That's more in line with what I'm used to. I have not gassed up since November though.
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