The Value of Premium Gas

Changes in the marketplace have eroded premium gasoline’s sales, but the grade still accounts for roughly 13% of all gasoline sales.
July 13, 2018

ALEXANDRIA, Va. – Only one grade of gasoline was sold at the early fueling stations, until 1925 when a second grade of premium was introduced by both Gulf and Esso: premium.

Over the next few decades, other options were offered but the octane level of these different fuel blends varied considerably at the wholesale and retail level. That changed in 1972, when the U.S. Federal Trade Commission required minimum octane ratings posted on all fueling dispensers. In most areas of the United States today, regular gasoline is 87 octane, mid-grade is 89 and premium is 91 to 93.

In 1989, the earliest that the U.S. Energy Information Administration’s Refiner Motor Gasoline Volumes began tracking the three grades, higher octanes accounted for nearly one-third (31.5%) of all gallons produced: premium comprised 23.2% and midgrade added another 8.3%.

However, premium and mid-grade both saw dramatic declines in volume over the ensuing 25 years as prices zoomed past the $2, $3 and even $4 marks across the country and consumers often opted to trade down to lower priced, lower octane fuels. Read more about premium gas in “The Value of Premium” at the NACS Fuels Resource Center.

It’s also important to note that premium gas is not the same as TOP TIER gasoline, which is an additive package. A recent NACS Magazine feature explores a 2016 AAA report that suggests TOP TIER gasoline is a preferable fuel for motorists. 

Bringing higher octane fuels to market is also a hot topic among automakers, the energy sector and related transportation industry stakeholders. The week the Fuels Institute and Co-Optima are co-hosting an Octane Workshop Series to review current research on the role of octane in the design of more efficient spark ignition, internal combustion engines. Participants will also identify potential next steps to advance the knowledge and awareness of higher octane fuels.

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