High cost lowers demand for premium gas
If you’ve tuned into the financial news lately, you know that oil prices have fallen dramatically in recent weeks. As I write this, the price of a gallon of regular is now about $3.70 on average nationwide.
That’s encouraging, but the fall has not happened as quickly as the rise. So consumers are right to remain concerned.
There’s another trend that may help consumers at the pump, and that’s a subtle turn away from premium-grade gasoline by automobile manufacturers — mostly Ford and General Motors — and an even greater shift among consumers.
Until the gas price explosion of 2008, manufacturers were eager to tout more horsepower for their vehicles in part by tuning the engines to get maximum performance using premium-grade gasoline.
This grade of gas generally rates at 91 octane to 93 octane (versus 87 octane for regular) and costs 20 cents to 30 cents more per gallon.
Overall, about 62 percent of all new cars come with recommendations that owners pump premium for maximum performance, up from less than 50 percent of cars in 2002.
Yet there are indications that drivers are forgoing the added boost of premium and running regular or 89-octane midgrade fuel instead. Demand for premium at the pump has fallen more than 50 percent in the last 10 years.
This year, Ford is touting that all its vehicles — save perhaps the ultra high-performance Mustangs — can run on regular fuel.
And even though all BMWs sold in the United States come with a “premium recommended” sticker, the company acknowledges that all will run on 87-octane regular, accompanied by a slight drop in performance.
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