Why does the price of premium gas rise at the same time regular gas does?

Question

It's not believeable that at all gas stations, all grades of gas are sold (consumed) at the same rate. AND since premium gas is less likely to be sold as fast if the prices rise. Should the "old" premium gas go unsold and stay at the old prices? And in that case shouldn't the price of regular gas actually rise higher than premium? And shouldn't this mean more people buy premium gas - as if it were a better deal?

Answer 1

Gasoline, as much as we in the industry hate to admit, is a commodity.  Commodities have value that applies to all of that commodity, no matter where it is.  Consider gold.  If you buy a one ounce gold piece for $200, then gold increases in value to $700/ounce, your gold piece is worth $700.

Gasoline is the same.  If a station owner buys gasoline at $3/gallon, then it rises to $4/gallon, the inventory he has in the groun is now worth $4/gallon.  If it drops to $2/gallon, he's lost money.  This is why station owners struggle to make a profit on gasoline.  

Premium gasoline is more expensive to produce and has higher detergency levels than lower grades of gasoline, but ultimately, it is gasoline and subject to the same commodity principles.

Answer 2

The gas stations make more money that way. all the gas that they had in the ground cost less then the new price they have to pay for at the new price. So they make more. When the prices rise,  they rise for all of the octanes.

Answer 3

doesnt in my area...it was 10 cents diff between R and MID and prem...now prem is 15 to 20 cents higher then mid...SW virginia

Answer 4

fuel companies don't think the same as we do,they will put it up automatically,and just put it down to processing cost,if it makes you feel better,we UK DRIVERS are paying £1.05 for regular,and £1.09 for premium,we pay far more tax than you,in fact 60% is tax.

Answer 5

If your car requires premium gas, you have no choice but to put in premium gas, because regular gas will damage your engine.  

If it doesn't, then there is no sense buying it.

Premium gas is more expensive to refine, hence the higher price.