The word premium suggests high quality, the
best of the best, but with gasoline, premium is not always better,
thanks in part to coronavirus, gas prices have been relatively low compared
with the three peaks they had seen roughly a decade ago. Americans are paying more for premium
gasoline relative to the regular stuff than they had in the past. And some studies show Americans
collectively are wasting two billion dollars a year buying premium
gasoline they don't need. But for the vast majority of the cars
over on the road, 90 plus percent of the vehicles on the road and
do not require premium fuel. So it is worth understanding what makes
premium gas more expensive and what drivers are actually getting
out of it. The primary trait that distinguishes premium
gas from lower grade and less expensive fuel is its octane rating. Understanding that octane reading and which
cars are engineered for which gasoline is key to knowing whether it
is worth ponying up for the pricier stuff. In the United States, there are typically three grades of
fuel found at the gas pump, regular mid grade sometimes called plus
and a third level often called premium or something similar. The way to distinguish these
is by their octane ratings. The number that will be typically displayed
on the button used to select the fuel grade regular has an octane rating
of at least 87 mid grade runs, 88 to 90 and premium 91 to 94. In some higher elevation regions, 85 octane
gas can be used in some cars and is often found at pumps. In octane rating determines how resistant
a fuel will be to combustion, which matters because engines require
that gasoline explodes at exactly the right time. In an internal combustion engine, fuel
and air combine inside a cylinder chamber where they are compressed by a
piston and then ignited by a spark plug. The explosion pushes the piston,
which turns a crank shaft and ultimately turns the wheels
that move a vehicle. Everything needs to happen in that
order, and the process happens extremely quickly because an engine
consists of several cylinders all connected to the same crankshaft. Getting the timing right is crucial. If the octane rating is too low for
a certain engine, the fuel and air mixture inside the cylinder can combust
before the spark plug ignites it. This phenomenon, a form of abnormal
combustion, throws off the engines timing and can damage
it, sometimes severely. This mistimed explosion can also create a
knocking or pinging sound in the engine, which is why the phenomenon
is often called engine knock. So why would a fuel ignite
before it is supposed to? Well, different engines have
different compression ratios. That is the amount of
pressure applied in the cylinder. An engine that can create more pressure,
can squeeze more energy out of every drop of fuel engines
with high compression ratios. And they are typically ones made
for some kind of higher performance, whether it is large trucks that are
used for towing big loads or race cars. The preferred method for preventing
knock was once adding led to gasoline. The element had antilock properties,
but the Clean Air Act in the 1970s banned the use of
lead in the United States. Notice that all gasoline in the U.S. is referred to as unleaded. So the industry had to find
other chemicals to reduce knocking. Today, two primary sources are used
alchol it a chemical byproduct of petroleum refining and ethanol. Basically alcohol derived
from plants. Cars with very high performance engines
require very high octane fuel, and some fueling stations, usually near
racetracks, can have dedicated pumps with octane fuel that is
rated at 100 or above. But most engines on the roads simply
don't need that because they don't create enough pressure to require it. And for many cars, there is little,
if any, benefit to putting high grade fuel in an ordinary engine. The higher price of premium gas and
the marketing around it appears to be part of its appeal for some drivers,
the very fact that it is called premium or some synonymous name like
Supreme suggests fuel of a higher quality. The labeling is
certainly something to consider. You put premium on something and people will
assume that that that it is a premium product. Right. And, you know, the vehicle is
our second largest asset, you know, that we have. And I think there are
a lot of people that believe that they want to take care of that asset by
doing the best thing possible for it. But but you're literally putting that money
out of the tailpipe when you make that decision. There also appears
to be a common perception that premium gasoline somehow contains extra
ingredients that help clean engines or make them
run more smoothly. There are certain additives required
by the Environmental Protection Agency, included in all gasoline, and
some retailers have added extra additive. On top of that, a
group of automakers banded together and developed a top tier gasoline standard
with extra detergents that remove more buildup than the
lowest permissible standard. Tests performed by the American
Automobile Association, more commonly known as Triple A, found that the top tier
standard can keep engines up to 19 times cleaner. Top tier gasoline is offered
only by some retailers, but in order to qualify as a top tier
provider, a retailer has to provide these extra additives in all fuel,
grades, additives or not. Aaa and other industry groups say owners
should use the grade of fuel. The manufacturer says they should use
some manuals, say regular gas is fine. Others might allow
regular but recommend premium. And a relatively small portion
of cars require a premium. If a vehicle manual says regular gasoline
is fine, then adding premium is not going to make
much of a difference. I think the biggest myth is that premium
is somehow much better, or you can get some sort of
performance increase from premium. But this really goes back to what
your car manufacturer intended your car to be used for. That is, unless
you drive a vehicle that requires higher octane fuel and can be damaged if
you try to substitute something lower. This is where things
become a bit nuanced. Over the last decade or so, automakers
have increasingly relied on a long available technology called forced induction
to make engines run more powerfully or efficiently to very common
forms of forced induction systems are turbochargers and superchargers. Essentially, these systems compress and
force air into the engine. Since an engine works by igniting a
mixture of air and fuel, forcing more air into a cylinder along with an
increase in fuel allows each engine cylinder to get more power than it
otherwise would if it were naturally aspirated. That is, if the engine
simply sucked in air from the atmosphere. Turbochargers have become a
popular choice for automakers looking to squeeze more power out
of a smaller engine, often improving miles per gallon and meeting
increasingly stringent fuel economy regulations. In 2008, just 10 percent
of cars came standard with turbo charged engines, according
to Edmands. By 2018, that number had
climbed to 45 percent. The rub is that forced induction
creates greater pressure in the engine and thus may either require or
benefit from higher octane, i.e. more expensive fuel. That said, even driving a turbo
charged vehicle does not guarantee you need high octane fuel and a
naturally aspirated high performance vehicle may require it. Automakers now place
systems in vehicles which can sense knocking or pinging vibrations and adjust
sparkplug timing to work better with the fuel in the tank. There are certain situations where premium
gas might confer an advantage, such as when towing or
carrying a heavy load. However, even in that case, AAA
tests have shown the performance difference is very, very small, somewhere around three
to five percent in terms of economy or horsepower. Higher octane fuel has always been
more expensive than regular, but in recent years, the price gap between
regular and premium fuel has widened dramatically. And it is worse in
different parts of the country. And in different areas of the
country, the premium between regular and premium, what we call or what I
call the great gap between regular grade and premium grade is much higher, especially
in areas of the Great Lakes. On average, across the United States, premium
is about 50 to 60 cents higher per gallon. But the gap between premium and regular
is especially wide in areas like the Great Lakes region
where Don lives. Just down here at my corner store, it's
a dollar twenty more per gallon for premium than regular. And you go to areas of California. It used to be 15 cents in some
areas of California, 15 cents more for premium than regular. It's gone up now,
some cases 20 to 30 cents. But you'll find that in areas the Great
Lakes and an expanding part of the country, it's not just that 20
or 30 cents a gallon more. Now for premium, you may find 50
to 60 cents common for a national average of that premium as more. And it didn't always be
it wasn't always like that. The reason for this gap is
the availability of the alchol. It used to ramp up octane levels in
the fuel regions like the West Coast, where there is higher demand for
premium fuel, has induced refiners to build more al-khalidi capacity
into the refining processes. But areas such as the Great Lakes, where
there is not as much demand for high octane fuel, have a lesser
capacity to produce the stuff. However, the gap
is widening everywhere. Triple A's tracking has found that
the price gap between premium and regular tends to widen when overall fuel
prices drop and narrow when fuel prices climb. So what's what's
probably happening is that as prices come down for gasoline, retailers
have found other ways to make additional margin by adding increasing
the price to premium. And and it sort of makes sense. As someone pulls up to the pump,
you find two dollars a gallon gasoline and you think, well, maybe I'll just give
my car a treat and treat it to premium and to only 50
or 60 cents more. And it's so cheap anyhow. Why not do it? But but our research
has shown time and time again that Americans are wasting over two billion
dollars a year doing that. And it is not a treat for
your vehicle unless it requires premium gasoline, in which case you need to
run it in every single tank regardless of the cost. New fuel blends may help
raise octane levels in cars at a lower cost, and one of them may
include something you typically see on your dinner plate. Corn ethanol, which
is chemically alcohol, is refined from vegetables. And in the United
States, that typically means corn ethanol has the benefit of being
a very high octane substance. There are actually many cars on the road
that can run on fuels that are up to 85 percent. Ethanol typically referred to
as flex fuel vehicles. They first garnered attention as a
solution to reducing greenhouse gases. Flex fuel vehicles get comparable power
and acceleration to gasoline only vehicles, though they tend to
get fewer miles per gallon. Data suggest 85 emits lower concentrations
of some greenhouse gases, but higher concentrations of
other toxins. Part of what makes ethanol gas a
carbon reducing solution is the fact that it is made from crops, which act as
a sink for the carbon dioxide released into the atmosphere by
the burning of fuels. A 2012 study from the Argonne
National Laboratory, for example, found that when considering the full lifetime of
a vehicle, fees could reduce overall greenhouse gas emissions
by 34 percent. Customers may also see a pretty serious
benefit at the pump in a much lower price for higher octane fuel. It's conceivable that, say, in five years,
instead of filling up a premium for three dollars, you could fill up
with the equivalent say ninety three or ninety five octane for a dollar
a gallon less than you're paying now. Conceivably because corn is so cheap,
mixing more corn into the gasoline, so long as manufacturers build a car that
can handle it is going to be a much lower priced alternative. And it is possible that his
car companies make internal combustion engines ever more efficient, in part
to meet emissions regulations. They could design ordinary engines in
ways race car engines are designed today. You know, I'm a I'm a racer. I raced cars have my whole life. And and, of course, in a
race car, we run on fuel. That is, there's one hundred or
one hundred and fifteen octane. And it's all because you are turning
this week every little bit of performance that you can out of
that out of that engine. So it's no mystery that that
compression ratios and other strategies like that increase the efficiency of an engine
before we maybe make the switch to electric or fuel cell or something
in the future that they're going to to push every boundary and pull every
lever possible to get the maximum efficiency out. And that could mean
that in the future either. Ethanol or some other means, we see
some very, very high octane rating fuel at the pump available for
consumers from vehicles that require it. One of the biggest stories in the
automotive world over the last two decades has been the slow but
determined shift toward electric cars. And for many drivers, trips to the gas
station are already a thing of the past. But electric vehicles in 2020 still
make up less than two percent of sales. And many in the industry say
the bridge to a fully electric fleet could take a long, long time. So in the meantime, the millions of
drivers that pack roads across the country will have to keep filling up. A staggering number of them could find
one of the biggest ways to save money. Doing so is printed in plain
English right in their own vehicles manual.
