Premium gas
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I doubt that many stations have a problem with "old stock". The busiest stations around here, Costco, have multiple tanker trunk deliveries per day.
And the stock in the tanks has nothing to do with the price. It's not as if there is a sticker on the gas that needs to be changed. The price is set by the local competition, sometimes several times a day. And it's not the guy at the counter picking the price -- there is usually a centralized pricing service.
Premium does tend to have a different pricing pattern. People that buy premium tend to be less price sensitive, and tend to comparison shop only when the price jumps dramatically. Once they get used to the new price level, they will stop paying attention to the price. The retail price tends to hold at the higher level long after the wholesale price drops.
Here in California, where premium is effectively limited to 91 octane because of the state's unique blend requirements, the bump in price from 87 to 89 and 91 octane is typically +$0.10 and +$0.20 when prices are competitive, jumping to $0.40 when prices are stagnant or dropping.
And the stock in the tanks has nothing to do with the price. It's not as if there is a sticker on the gas that needs to be changed. The price is set by the local competition, sometimes several times a day. And it's not the guy at the counter picking the price -- there is usually a centralized pricing service.
Premium does tend to have a different pricing pattern. People that buy premium tend to be less price sensitive, and tend to comparison shop only when the price jumps dramatically. Once they get used to the new price level, they will stop paying attention to the price. The retail price tends to hold at the higher level long after the wholesale price drops.
Here in California, where premium is effectively limited to 91 octane because of the state's unique blend requirements, the bump in price from 87 to 89 and 91 octane is typically +$0.10 and +$0.20 when prices are competitive, jumping to $0.40 when prices are stagnant or dropping.
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Does the information regarding different grades of crude being necessary for premium vs regular have it's origin in rumor or in fact? Sounds sketchy.
I guess it stands to reason that the price *difference* between regular and premium would rise as the price of fuel also rises. Back in the '90s, it was about $1.00 for regular, $1.10 for mid, and $1.20 for premium. That's a 10% jump for each grade. Now that gas is about $2.00 for regular, I'd expect mid to be about $2.20 and premium to be about $2.40. When gas was $3.00 for regular, it was about $3.30 for mid and $3.60 for premium.
It seems *generally* pretty consistent to me.
It seems *generally* pretty consistent to me.
Originally Posted By: LoneRanger
Does the information regarding different grades of crude being necessary for premium vs regular have it's origin in rumor or in fact? Sounds sketchy.
Agreed. What makes premium different isn't the bulk gasoline itself, its the octane boosters that are added. Saying that premium requires better crude than regular is like saying a Snickers requires better chocolate than a Milky Way. No, it just requires peanuts!
Does the information regarding different grades of crude being necessary for premium vs regular have it's origin in rumor or in fact? Sounds sketchy.
Agreed. What makes premium different isn't the bulk gasoline itself, its the octane boosters that are added. Saying that premium requires better crude than regular is like saying a Snickers requires better chocolate than a Milky Way. No, it just requires peanuts!
Just because the bulk gas has gotten lower in price doesn't mean that the octane booster has gotten lower. However; I'm sure there is some gouging here to make up for lost revenue by the oil companies, distributors and stations. Ed
They usually run a $0.30 spread between grades here. Some times they drop the 87 price to match local prices but raise the 89 or 93 price.
In my area there is 92 and 93 octane premium, all with ethanol. Two different refineries. I seek the 93 octane when looking for premium.
In my area there is 92 and 93 octane premium, all with ethanol. Two different refineries. I seek the 93 octane when looking for premium.
Originally Posted By: 440Magnum
Originally Posted By: LoneRanger
Does the information regarding different grades of crude being necessary for premium vs regular have it's origin in rumor or in fact? Sounds sketchy.
Agreed. What makes premium different isn't the bulk gasoline itself, its the octane boosters that are added. Saying that premium requires better crude than regular is like saying a Snickers requires better chocolate than a Milky Way. No, it just requires peanuts!
I wish I'd kept the article, but what I said earlier had merit. Something like - the cheaper shale oil lends itself well to making regular, but is too costly to refine to premium, so they use classicaly-sourced crude. It's cheaper to make premium out of "higher-grade" (my loose term) crude which was not sourced from shale, but the supply line for the two differing crudes is different.
Originally Posted By: LoneRanger
Does the information regarding different grades of crude being necessary for premium vs regular have it's origin in rumor or in fact? Sounds sketchy.
Agreed. What makes premium different isn't the bulk gasoline itself, its the octane boosters that are added. Saying that premium requires better crude than regular is like saying a Snickers requires better chocolate than a Milky Way. No, it just requires peanuts!
I wish I'd kept the article, but what I said earlier had merit. Something like - the cheaper shale oil lends itself well to making regular, but is too costly to refine to premium, so they use classicaly-sourced crude. It's cheaper to make premium out of "higher-grade" (my loose term) crude which was not sourced from shale, but the supply line for the two differing crudes is different.
Originally Posted By: 440Magnum
Originally Posted By: LoneRanger
Does the information regarding different grades of crude being necessary for premium vs regular have it's origin in rumor or in fact? Sounds sketchy.
Agreed. What makes premium different isn't the bulk gasoline itself, its the octane boosters that are added. Saying that premium requires better crude than regular is like saying a Snickers requires better chocolate than a Milky Way. No, it just requires peanuts!
There are many articles which mention the shale oil angle.
https://blog.gasbuddy.com/posts/Premium-...43402-3668.aspx
http://247wallst.com/energy-economy/2016...we-got-there/2/
http://www.chicagotribune.com/business/ct-chicago-premium-gas-1224-biz-20151223-story.html
Originally Posted By: LoneRanger
Does the information regarding different grades of crude being necessary for premium vs regular have it's origin in rumor or in fact? Sounds sketchy.
Agreed. What makes premium different isn't the bulk gasoline itself, its the octane boosters that are added. Saying that premium requires better crude than regular is like saying a Snickers requires better chocolate than a Milky Way. No, it just requires peanuts!
There are many articles which mention the shale oil angle.
https://blog.gasbuddy.com/posts/Premium-...43402-3668.aspx
http://247wallst.com/energy-economy/2016...we-got-there/2/
http://www.chicagotribune.com/business/ct-chicago-premium-gas-1224-biz-20151223-story.html
Where I live, the price difference between 87 octane and 93 octane varies greatly based on location. Dirty old gas stations would charge $.60 per gallon more, newer and cleaner ones charged closer to $.30-$.40.
In certain 7-11 and Sunoco stations have both 91 and 93 octane. The price difference at 7-11 is about $.15, but Sunoco only saves $.05 or less.
I use 91 octane in my car when 7-11 has it, it doesn't seem to have an effect on the performance of my car. I have heard that the EVO makes enough boost to make 93 octane worth using.
In certain 7-11 and Sunoco stations have both 91 and 93 octane. The price difference at 7-11 is about $.15, but Sunoco only saves $.05 or less.
I use 91 octane in my car when 7-11 has it, it doesn't seem to have an effect on the performance of my car. I have heard that the EVO makes enough boost to make 93 octane worth using.
Originally Posted By: 440Magnum
This is the time of year gas prices are falling. Higher volume grades drop faster than premium, or at least that's always been my observation.
Of course the converse SHOULD be true but it never is- when prices are rising all the grades rise in unison (otherwise premium would be cheaper than regular).
Well it does have a little to do with accounting method. Last In First Out (LIFO) is the typical structure used. The price of the latest drop of fuel is the price that is used to determine the pump price. The lower grade tanks are refilled more frequently, so LIFO pricing would cause changes more frequently. When prices are dropping, and there is no need to fill the Premium storage tank, then leave it till it gets down low and keep the pump price the same. When prices are rising, just put 100 gallons of premium in the storage tank, and then, again using LIFO, charge the new price for all the fuel in the tank. That is why you seen the pattern that you do. A little bit unethical to some degree, but perfectly legal and accepted accounting practice.
Using this methodology, a station will try to time a premium fuel buy so that they fill the tank at the lowest cost, knowing the price will be rising. Then as the price rises, just buy partial loads of Premium to inflate the price of the whole tank. When prices are dropping, hold off a fuel delivery so that current tank pricing still applies, and have fuel brought in only as needed. That is why it is important for a station retailer to follow market projections on fuel price fluctuation and maximize their profit margin. A savvy consumer will do the same thing and maximize their purchasing dollar also. I follow market projections to some degree regarding my commercial fuel purchases.
This is the time of year gas prices are falling. Higher volume grades drop faster than premium, or at least that's always been my observation.
Of course the converse SHOULD be true but it never is- when prices are rising all the grades rise in unison (otherwise premium would be cheaper than regular).
Well it does have a little to do with accounting method. Last In First Out (LIFO) is the typical structure used. The price of the latest drop of fuel is the price that is used to determine the pump price. The lower grade tanks are refilled more frequently, so LIFO pricing would cause changes more frequently. When prices are dropping, and there is no need to fill the Premium storage tank, then leave it till it gets down low and keep the pump price the same. When prices are rising, just put 100 gallons of premium in the storage tank, and then, again using LIFO, charge the new price for all the fuel in the tank. That is why you seen the pattern that you do. A little bit unethical to some degree, but perfectly legal and accepted accounting practice.
Using this methodology, a station will try to time a premium fuel buy so that they fill the tank at the lowest cost, knowing the price will be rising. Then as the price rises, just buy partial loads of Premium to inflate the price of the whole tank. When prices are dropping, hold off a fuel delivery so that current tank pricing still applies, and have fuel brought in only as needed. That is why it is important for a station retailer to follow market projections on fuel price fluctuation and maximize their profit margin. A savvy consumer will do the same thing and maximize their purchasing dollar also. I follow market projections to some degree regarding my commercial fuel purchases.
Originally Posted By: LoneRanger
Does the information regarding different grades of crude being necessary for premium vs regular have it's origin in rumor or in fact? Sounds sketchy.
Classic internet rumor. The refining process leftovers might vary a bit depending on the type of crude but what goes into the pipelines as a finished produce is the same. There exist "pipelines grades" of fuel which enter the pipeline from many sources. There aren't that many refineries in the US and nobody to my knowledge sends "special" tanker loads of wicked good crude derived 93 from Texas to Maine.
Does the information regarding different grades of crude being necessary for premium vs regular have it's origin in rumor or in fact? Sounds sketchy.
Classic internet rumor. The refining process leftovers might vary a bit depending on the type of crude but what goes into the pipelines as a finished produce is the same. There exist "pipelines grades" of fuel which enter the pipeline from many sources. There aren't that many refineries in the US and nobody to my knowledge sends "special" tanker loads of wicked good crude derived 93 from Texas to Maine.
Originally Posted By: TiredTrucker
Originally Posted By: 440Magnum
This is the time of year gas prices are falling. Higher volume grades drop faster than premium, or at least that's always been my observation.
Of course the converse SHOULD be true but it never is- when prices are rising all the grades rise in unison (otherwise premium would be cheaper than regular).
Well it does have a little to do with accounting method. Last In First Out (LIFO) is the typical structure used. .....
That's not been my experience, over my entire lifetime, in this part of the country. I always price it based on replacement cost, and I've observed all my competitors apparently doing the same, with the exception of one c store chain which always seems out of sync - they are too cheap when everyone else is high, and way too high when everyone else is cheap.
When the replacement price goes up, so does my margin. When replacement cost goes down, I lose money. Such is life.
Originally Posted By: 440Magnum
This is the time of year gas prices are falling. Higher volume grades drop faster than premium, or at least that's always been my observation.
Of course the converse SHOULD be true but it never is- when prices are rising all the grades rise in unison (otherwise premium would be cheaper than regular).
Well it does have a little to do with accounting method. Last In First Out (LIFO) is the typical structure used. .....
That's not been my experience, over my entire lifetime, in this part of the country. I always price it based on replacement cost, and I've observed all my competitors apparently doing the same, with the exception of one c store chain which always seems out of sync - they are too cheap when everyone else is high, and way too high when everyone else is cheap.
When the replacement price goes up, so does my margin. When replacement cost goes down, I lose money. Such is life.
Originally Posted By: Blueskies123
Originally Posted By: rooflessVW
Yeah I went down to the beach last weekend and it was a 90 cent difference!
So I'm paying $20 more a tank than I would with regular... Ridiculous!
If you continue to buy it they will continue to raise the price.
Yeah, ok. What should I do?
Originally Posted By: rooflessVW
Yeah I went down to the beach last weekend and it was a 90 cent difference!
So I'm paying $20 more a tank than I would with regular... Ridiculous!
If you continue to buy it they will continue to raise the price.
Yeah, ok. What should I do?
Yesterday here in Tennessee, 87 was $1.75, 89 was $2.05 and 93 was $2.25.
I remember years ago before gas prices hit $4.50 a gallon when 87 was around $1.75, 93 was only $1.95 a gallon.
So say 15 years ago there was a 10 cents difference, now there is a .50 cents difference between 87 and 93.
Strange enough when gas hit $4.50 a gallon, Sunoco's 100+ racing fuel was still around $5.50 a gallon! So apparently racing fuel and pump gas does not follow one another.
It's funny that gas prices skyrocketed after Hurricane Katrina supposedly do to short supply. A month later before Rita even touched ground, gas prices artificially shot up to over $3.50 a gallon.
Here is a good example of price gouging. I took these photos off I-81 in TN shortly after Hurricane Rita. The cost of gasoline in the city varied from $3.80 $4.00 a gallon. I guess the price varied so much because nobody could make up their mind how much they wanted to gouge people.
$4.19 versus $4.99 per gallon? HHMMM which would you buy...
Directly across the street:
Here is a post I made concerning why ethanol is more expensive in metro areas than rural areas:
http://www.bobistheoilguy.com/forums/ubb...ive#Post4160160
I remember years ago before gas prices hit $4.50 a gallon when 87 was around $1.75, 93 was only $1.95 a gallon.
So say 15 years ago there was a 10 cents difference, now there is a .50 cents difference between 87 and 93.
Strange enough when gas hit $4.50 a gallon, Sunoco's 100+ racing fuel was still around $5.50 a gallon! So apparently racing fuel and pump gas does not follow one another.
It's funny that gas prices skyrocketed after Hurricane Katrina supposedly do to short supply. A month later before Rita even touched ground, gas prices artificially shot up to over $3.50 a gallon.
Here is a good example of price gouging. I took these photos off I-81 in TN shortly after Hurricane Rita. The cost of gasoline in the city varied from $3.80 $4.00 a gallon. I guess the price varied so much because nobody could make up their mind how much they wanted to gouge people.
$4.19 versus $4.99 per gallon? HHMMM which would you buy...
Directly across the street:
Here is a post I made concerning why ethanol is more expensive in metro areas than rural areas:
http://www.bobistheoilguy.com/forums/ubb...ive#Post4160160
Last edited:
Originally Posted By: Hokiefyd
I guess it stands to reason that the price *difference* between regular and premium would rise as the price of fuel also rises. Back in the '90s, it was about $1.00 for regular, $1.10 for mid, and $1.20 for premium. That's a 10% jump for each grade. Now that gas is about $2.00 for regular, I'd expect mid to be about $2.20 and premium to be about $2.40. When gas was $3.00 for regular, it was about $3.30 for mid and $3.60 for premium.
It seems *generally* pretty consistent to me.
Good catch. Its about percentages!
I guess it stands to reason that the price *difference* between regular and premium would rise as the price of fuel also rises. Back in the '90s, it was about $1.00 for regular, $1.10 for mid, and $1.20 for premium. That's a 10% jump for each grade. Now that gas is about $2.00 for regular, I'd expect mid to be about $2.20 and premium to be about $2.40. When gas was $3.00 for regular, it was about $3.30 for mid and $3.60 for premium.
It seems *generally* pretty consistent to me.
Good catch. Its about percentages!
Originally Posted By: TurboFiat124
Yesterday here in Tennessee, 87 was $1.75, 89 was $2.05 and 93 was $2.25.
I remember years ago before gas prices hit $4.50 a gallon when 87 was around $1.75, 93 was only $1.95 a gallon.
So say 15 years ago there was a 10 cents difference, now there is a .50 cents difference between 87 and 93.
Strange enough when gas hit $4.50 a gallon, Sunoco's 100+ racing fuel was still around $5.50 a gallon! So apparently racing fuel and pump gas does not follow one another.
It's funny that gas prices skyrocketed after Hurricane Katrina supposedly do to short supply. A month later before Rita even touched ground, gas prices artificially shot up to over $3.50 a gallon.
Here is a good example of price gouging. I took these photos off I-81 in TN shortly after Hurricane Rita. The cost of gasoline in the city varied from $3.80 $4.00 a gallon. I guess the price varied so much because nobody could make up their mind how much they wanted to gouge people.
$4.19 versus $4.99 per gallon? HHMMM which would you buy...
Directly across the street:
Here is a post I made concerning why ethanol is more expensive in metro areas than rural areas:
http://www.bobistheoilguy.com/forums/ubb...ive#Post4160160
Here in central Mississippi there were reports of those fleeing Katrina getting gouged trying to rent a hotel room. Pretty ugly word 'gouge' is.
Yesterday here in Tennessee, 87 was $1.75, 89 was $2.05 and 93 was $2.25.
I remember years ago before gas prices hit $4.50 a gallon when 87 was around $1.75, 93 was only $1.95 a gallon.
So say 15 years ago there was a 10 cents difference, now there is a .50 cents difference between 87 and 93.
Strange enough when gas hit $4.50 a gallon, Sunoco's 100+ racing fuel was still around $5.50 a gallon! So apparently racing fuel and pump gas does not follow one another.
It's funny that gas prices skyrocketed after Hurricane Katrina supposedly do to short supply. A month later before Rita even touched ground, gas prices artificially shot up to over $3.50 a gallon.
Here is a good example of price gouging. I took these photos off I-81 in TN shortly after Hurricane Rita. The cost of gasoline in the city varied from $3.80 $4.00 a gallon. I guess the price varied so much because nobody could make up their mind how much they wanted to gouge people.
$4.19 versus $4.99 per gallon? HHMMM which would you buy...
Directly across the street:
Here is a post I made concerning why ethanol is more expensive in metro areas than rural areas:
http://www.bobistheoilguy.com/forums/ubb...ive#Post4160160
Here in central Mississippi there were reports of those fleeing Katrina getting gouged trying to rent a hotel room. Pretty ugly word 'gouge' is.
I thought of this thread at the Shell station last night. Regular: 1.91, Midgrade: 2.35, Premium: 2.65.
Back at the turn of the century, a Shell station near me sold premium for the price of regular one day a week. That seemed like a real bargain. Premium at the time was about 1.79.
That was in Elkins, Arkansas. If you didn't speed and made sure all your lights worked, you could get out of town with a tank of premium and no attention from the local law.
Back at the turn of the century, a Shell station near me sold premium for the price of regular one day a week. That seemed like a real bargain. Premium at the time was about 1.79.
That was in Elkins, Arkansas. If you didn't speed and made sure all your lights worked, you could get out of town with a tank of premium and no attention from the local law.
Originally Posted By: Rhymingmechanic
I thought of this thread at the Shell station last night. Regular: 1.91, Midgrade: 2.35, Premium: 2.65.
Thats a brutal upcharge. Local Costco is 2.04 right now for 87, and 2.34 for 93. I can deal with a 30 cent gap. 50+ is robbery.
I thought of this thread at the Shell station last night. Regular: 1.91, Midgrade: 2.35, Premium: 2.65.
Thats a brutal upcharge. Local Costco is 2.04 right now for 87, and 2.34 for 93. I can deal with a 30 cent gap. 50+ is robbery.
Originally Posted By: Rhymingmechanic
I thought of this thread at the Shell station last night. Regular: 1.91, Midgrade: 2.35, Premium: 2.65.
Back at the turn of the century, a Shell station near me sold premium for the price of regular one day a week. That seemed like a real bargain. Premium at the time was about 1.79.
That was in Elkins, Arkansas. If you didn't speed and made sure all your lights worked, you could get out of town with a tank of premium and no attention from the local law.
Shell is a little different, they went with a new additive which increases their price even more. They're also top tier.
I thought of this thread at the Shell station last night. Regular: 1.91, Midgrade: 2.35, Premium: 2.65.
Back at the turn of the century, a Shell station near me sold premium for the price of regular one day a week. That seemed like a real bargain. Premium at the time was about 1.79.
That was in Elkins, Arkansas. If you didn't speed and made sure all your lights worked, you could get out of town with a tank of premium and no attention from the local law.
Shell is a little different, they went with a new additive which increases their price even more. They're also top tier.
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