Premium gas prices have been on the rise, with the average price exceeding $5.40 for several days this spring. Despite the high cost, many American drivers continue to fill up with premium gas. The price difference between premium and regular gas has grown significantly over the past two decades, with premium gas now costing around $1 more per gallon than regular gas.

Why the Increase?

The increase in demand for premium gas can be attributed to the growing number of new vehicles that recommend or require premium-grade octane levels of at least 91. However, many drivers also falsely believe that high-octane gas offers better performance for their engines. In reality, the benefits of premium gas are only noticeable in vehicles with high-compression engines that are prone to engine knocking.

Gas stations have taken advantage of the increased demand for premium gas, raising their prices and creating a profit engine for station owners. The Energy Information Administration reports that the gap between premium and regular gas prices has grown from 20 cents in 2005 to nearly $1 today. However, the wholesale price difference between premium and regular gas has only increased by 20 cents over the past two decades, indicating that gas stations are making a significant profit from the sale of premium gas.

Marketing and Perception

The perception that premium gas is better for engines has been created through decades of marketing. The term ‘premium’ was first introduced in the 1920s, and since then, gas stations have continued to market their high-octane products as superior to regular gas. Many drivers believe that premium gas offers better performance, despite the fact that most vehicles do not require it.

In conclusion, the surge in premium gas prices can be attributed to a combination of factors, including increased demand, marketing, and the desire for perceived better performance. However, the reality is that most drivers do not need premium gas, and the benefits are only noticeable in vehicles with high-compression engines.

Original reporting: KTVZ (Central Oregon) — read the source article.