Gas Companies and Auto Makers Love it When You Buy Premium Gas!

By Scott Siegel

http://www.beatthegaspump.com

Gas companies and auto makers love it when you buy premium gas. They like it so much that they try to perpetuate myths about premium gas. Myths like premium gas will lead to better fuel economy. Myths like premium gas will make your car perform better. Why do the gas companies and auto makers like premium so much?

Gasoline refiners and retailers like premium gas because it's a lot more profitable for them than regular gas. You pay 20 cents more for premium gas while the retailer only pays about 8 cents more for that same gallon. That means the retailer makes an extra 12 cents on every gallon of premium gas he sells.

The refineries take in a few cents per gallon more on premium than on regular when they sell to distributors. When you realize that the few cents per gallon is multiplied by the tens of thousand of gallons of gas that refineries sell, you can see that it adds up to a lot of extra profit.

The gas refineries and retailers are not the only ones that make more money from premium gas. Auto makers use premium gas to add to their profits too. One way they do that is by creating a higher perceived value for their cars.

If a car has to have premium gas it must have a more expensive engine therefore the car must cost more. Using that logic the car companies can get higher prices on some models by recommending only premium gas can be used in those models. This adds credibility to their contention that the car is worth more money.

Another benefit of premium gas that auto makers capitalize on is to take advantage of the anti-knock properties of premium gas. By designing engines to be optimized for that property of premium gas they can create engines that in fact do get more horsepower out of premium then out of regular.

Since there is some horsepower gain it allows the car makers to advertise higher horsepower ratings for their engines. Again, higher horsepower ratings means more expensive car which means more profit for the auto makers.

These optimized for premium engines actually do put out a little more horsepower on premium than with regular. But most car experts and engineers seem to agree that if you use regular in a premium engine, the difference in horsepower is so small, you probably can't tell.

Premium gas does not increase fuel economy. Regular gas can be run in a so called premium engine without any noticeable effect. In the end it all comes down to money. By convincing you that you need to use premium gas they are able to take more money out of your pocket and put it in theirs.


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Scott Siegel is the author of a 143 page manual of industry insider information on saving gas and money at the pump (beatthegaspump.com). Visit us to learn how you can get better gas mileage. Find out how to increase gas mileage.

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