Price difference between Reg, Mid & Premium gas

[Benzadmiral]

Originally Posted By: SonicMustang

You're a moron. Demand for gasoline is very elastic. When prices go up 50 cents a gallon, drivers dump their Excursions and by Priuses. Gasoline/oil price and demand have never been linear. If demand goes down 5%, prices drop by more than 5%. If prices go up 5%, demand falls by more than 5%.

You're a moron. You write, "they must continue to consume it in some way, either in their own vehicles or busses..." Huh? If you go from burning 30 gallons of gasoline per week in your car a switch to a bus, your demand for fuel is reduced to to maybe a gallon or two and there's an extra 28 unsold gallons on the market.

Is there really any need for name-calling? Just post your response.

 

[WobblyElvis]

Other forums I have been a member of ban members who, without just reason, treat others this way.

 

[MCompact]

Originally Posted By: Benzadmiral

Is there really any need for name-calling? Just post your response.


You are wasting your breath; that's his/her SOP.

 

[SteveSRT8]

Originally Posted By: MCompact
Originally Posted By: Benzadmiral

Is there really any need for name-calling? Just post your response.


You are wasting your breath; that's his/her SOP.


Someone we know? Mori, is that you (again!)?

Time for a little vacation...\

 

[Garak]

Here, the "rule" used to be, at least in the Regina market, of a 10 cent per litre difference between regular and premium. That hung in place for a long time. Now, it's usually a lot higher than that, but can be lower, too. Premium prices are much more diverse than regular prices.

 

[y_p_w]

Originally Posted By: Benito
Originally Posted By: SonicMustang
You're a moron. Demand for gasoline is very elastic.


Gas is a price-inelastic product, especially in the short term.

Products which consumers must have, and which are hard to substitute, have low price elasticity / are inelastic.

Products which consumers can do without, and which are easier to substitute, have higher price elasticity.

http://en.wikipedia.org/wiki/Price_elasticity_of_demand#Selected_price_elasticities


The refining process is also kind of a limiting factor. The reality is that a refinery makes so much of this octane rating, so much of that, and in the end they have to blend them to make fuel to sell and not have any left over, which would be expensive to dispose of or would have to be sold at a low price. They're also limited by the industry standard octane grades.

If they really could just sell their straight refining streams as fuel, there would probably be 98 octane AKI at $5/gallon, 94 at $4/gallon, 91 at $3.25/gallon, 86 at $2.75/gallon, etc. These are just made up numbers. However, what I'm getting at is that they pricing is kind of an artificial construct. There's no particular reason why the 10 cent spread exists other that it's been traditional. There's no particular reason why (my previous example) electronics makers produce products that cost the same to make but are firmware limited for features/performance to sell at different price points. And there's no particular reason why movie theater prices have to end in 25 cent increments. The spread isn't as important to the seller as how much they believe they'll make overall. Heck - I remember hearing that a lot of gas station owners were actually paying about the same price for regular and premium, but that in terms of "profit" they were typically making the bulk of their profit on fuel sales selling premium. The pricing is all about how to market a product and not the reality of how much it costs to manufacture it.

 

[TiredTrucker]

Gasoline, like any other commodity, is a market exchange traded thing. What the market price will pay for it is what the refiners can sell it for. Now once you throw on transport costs, fuel taxes, and other stuff, then we get the "inflated" pricing for fuel at the pump. Considering that almost 1/3 of the cost per gallon at the pump is nothing but added on tax, it always amazes me how folks will pitch a fit over "big oil" but ignore 'big government", which didn't contribute one thing to the exploration, drilling, refining, etc to get a gallon of fuel to the consumer, yet bleeds the consumer for roughly 30% or more over what the actual cost of the fuel is.

Gasoline on the market exchange Friday......$2.12 a gallon. Anything else that makes the different grades of fuel is done at the fuel terminal before final delivery to the retailer, per the retailer's specifications.

 

[y_p_w]

There's a cluster of gas stations near where I live that now have 20 cent increments between regular/mid/premium. Except one, which now has a 30 difference between mid and premium.

 

[webfors]

I would use premium in both cars is the difference was 20 cents a gallon... or 5.27 cents per liter. At that price an argument could be made on fuel efficiency, engine cleanliness, butt feel, etc.

The difference is typically 12 - 15 cents per liter, or 45 - 57 cents per gallon, making is fiscally unreasonable.

 

[Touring5]

Today at a BP station I could hardly believe what I was seeing. Regular was $2.57 and Ultimate (93 octane) was $3.27. That's right, 70 cents between 87 and 93 (I believe 89 was around $2.80.)

I never considered the 91+ requirement for the BMW that big of a deal, but this might make me reconsider.

 

[badtlc]

I am now seeing places around the MW where premium is $1 more than regular.

Up until a month or so, my regular stations were $0.26/gal more for premium. Now most are around $0.60/gal. Not sure what is going on.

 

[y_p_w]

Originally Posted By: y_p_w
There's a cluster of gas stations near where I live that now have 20 cent increments between regular/mid/premium. Except one, which now has a 30 difference between mid and premium.

I'd note that more recently they all switched back to 10 cent increments between grades. I'd call it collusion except that there's a Costco fairly close and I've seen it when one station had a different price and then the other stations just reacted.

 

[Whimsey]

Here in northern NJ 89 octane is 40 cents more than 87 and 93 is 70 cents more than 87

.

Whimsey