I read a couple of articles that finally gave a good explanation of why premium gas costs so much. Something more insightful than just 'demand for premium is high'.
It said up until ten years ago, natural gas prices were high and therefore chemical manufacturers used naptha to make plastics. When natural gas prices dropped, chemical manufactures switched to that feedstock (even though it makes fewer byproducts) because was advantageous. That flooded the market with naptha which is low octane gasoline, driving its price down. So premium gas didn't go up in price so much as regular went down, increasing the spread between the two. And demand for diesel and aviation fuel was strong, so refiners made profit on those two products and dumped gasoline at cost.
Now with Covid, airlines aren't buying jet fuel (kerosene) and the refiners alternative is to make and sell more diesel fuel in a depressed market. In order to make a profit on refining a barrel of oil, they have to make it up on gasoline. Therefore the spread between diesel and gas is narrowing.
Interesting that the price of natural gas and jet fuel impact your relative gasoline cost.
It said up until ten years ago, natural gas prices were high and therefore chemical manufacturers used naptha to make plastics. When natural gas prices dropped, chemical manufactures switched to that feedstock (even though it makes fewer byproducts) because was advantageous. That flooded the market with naptha which is low octane gasoline, driving its price down. So premium gas didn't go up in price so much as regular went down, increasing the spread between the two. And demand for diesel and aviation fuel was strong, so refiners made profit on those two products and dumped gasoline at cost.
Now with Covid, airlines aren't buying jet fuel (kerosene) and the refiners alternative is to make and sell more diesel fuel in a depressed market. In order to make a profit on refining a barrel of oil, they have to make it up on gasoline. Therefore the spread between diesel and gas is narrowing.
Interesting that the price of natural gas and jet fuel impact your relative gasoline cost.