I started driving in 1996 back when you could get gasoline for around $1 a gallon. Back then there was a 10¢ surcharge for mid-grade gas and another 10¢ increase above that for premium grade gas.
Now that we’re paying $3.70ish a gallon that’s still the same.
How does that work? Regular goes up 375%, mid-grade goes up 350% and premium goes up 330%.
I don’t get it.
I would assume it is an issue of demand, but I really hadn’t noticed since I fill my car with Premium anyway. I hadn’t really been paying attention to Regular and Mid-Grade prices. Interesting item to take note of, though.
We’re getting screwed?
It’s a supply/demand issue. For the most part, fuel production is a fractional distillation process, meaning you distill crude oil, and get heavy hydrocarbons, like oils and greases, out of the bottom, while the lighter hydrocarbons, like kerosene, diesel, and jet fuel come out in the middle of the column, and gasoline comes out closer to the top. You can break heavier hydrocarbons up into lighter ones in a catalytic cracker, but that takes a lot of energy. Refineries can control how much of each you get, but only to a degree. If high prices cause the demand for premium gasoline to drop, it’s just not going to be that much more expensive over regular, because the refinery will produce it whether or not people are buying it in droves, or not buying it so much because of price.