This is something that I had not noticed until I left on a road trip last Thursday (8/14. I live near Charleston SC. When I got off I-95 in Virginia to get gas, I noticed that mid-grade was 25 cents more expensive than regular gas. Since then, both in NJ and in the Washington DC area, I have noticed a range of price differentials, from the “normal” 10 cents to as much as 50 cents. In the more extreme situations e.g. > $0.25, premium gas is usually no more than $0.10 more than mid-grade. None of this makes any sense to me. I have a sensitive Swedish car that requires mid-grade. Does anyone know the reasoning behind this differential insanity? Thanks.
I think it’s simply a matter of holding prices higher for stuff they don’t sell as much of. The bulk of their customers come in to buy regular, and they’re attracted by the price being lower than the guy across the street. However, they keep the cost of mid-grade and high-test up there so that they can get a better per-gallon profit off of those fuels, and since they don’t sell nearly as much of it as regular, they don’t feel the need to drop the prices as rock-bottom as they possibly can.
Incidentally, most gas stations make mid grade by mixing premium and regular at the pump end as I understand it. Mid-grade is generally the biggest rip-off in terms of price- you’re paying an awful lot for the 2 extra octane numbers. Most cars don’t need it, the ones that do need premium usually need 91 or better so it’s not good enough for them.
I think its purely marketing. The low price will get you in and then you see what you actually have to pay. In Minnesota most stations there is only a 10 or 15 cent difference from low to premium, and some stations its the same price for either.
Thanks for the quick responses. This is what I suspected - I didn’t really think there was any substantial reason for this phenomenon. I am going to see what the situation is down in my adopted homeland (SC) when I return & try to find the best situation (there are still some stations here in the DC area that have a $0.10 gap between the grades). If worst comes to worst, I think I will try mixing mid-grade & regular & then transitioning to regular & see what happens. If the engine knocks, I guess I’ll have to bite the proverbial bullet. I guess the oil companies can get away with anything they want to get away with, which is what I thought anyway. I rank oil companies with all the other entities that are purely profit driven & don’t give a hoot what happens to us e.g. the health insurance industry, credit industry, pharmaceutical industry…I could go on but I won’t. Thanks again.