U.S. Motorists Wasted Billions on Premium Gasoline Last Year: AAA

Source: By Jarrett Henshaw< Reuters • Posted: Wednesday, September 21, 2016

NEW YORK — U.S. consumers wasted billions of dollars last year filling their cars with costly premium-grade gasoline for no tangible benefit, according to a study by the country’s leading motorist advocacy group.

The report by Heathrow, Florida-based AAA comes as low pump prices and a growing economy enticed U.S. motorists to buy more premium-grade gasoline in June than in any month since 2003, according to the U.S. Energy Information Administration.

While an overwhelming majority of cars on U.S. roadways are designed to consume regular gasoline, the study found that motorists still use premium-grade in the hopes of achieving more horsepower and better fuel economy. As a result, U.S. drivers spent an estimated $2.1 billion extra by using premium gasoline in vehicles designed for regular fuel.

Premium provides little or no benefit to cars designed to run on lower octane, regular gasoline, the study said.

“Drivers see the ‘premium’ name at the pump and may assume the fuel is better for their vehicle,” John Nielsen, AAA’s managing director of automotive engineering and repair, said in a statement.

“AAA cautions drivers that premium gasoline is higher octane, not higher quality, and urges drivers to follow the owner’s manual recommendations for their vehicle’s fuel.”

What distinguishes premium from other grades is its increased ability – expressed in octane – to resist premature detonation, or knocking, as it is compressed in the engine before ignition.

Premium gas is used in high-compression engines so it is often associated with high-performance sportscars or luxury vehicles. Last week, a gallon of premium gasoline was selling on average 48 cents higher than regular gasoline, among the widest spreads since 1994, EIA data shows.

Refiners such as Royal Dutch Shell have focused on premium gasoline sales due to healthy margins and its rising popularity.

In June, 45.3 million gallons of premium gasoline was sold, the most in any month since 2003, according to EIA. Sales of premium gasoline, which make up less than 15 percent of U.S. gasoline sales, have increased at a faster rate than sales of regular gasoline in recent years.

AAA tested 87-octane (regular) and 93-octane (premium) gasoline in vehicles with a V-8, V-6 or I4 engine designed for regular-grade fuel. The testing found no significant increases in horsepower and fuel efficiency.

The survey found that 70 percent of U.S. drivers own a car requiring regular gasoline, while 16 percent drive cars that require premium fuel. The remaining 14 percent require mid-grade gasoline or an alternative source.

(Editing by Bernadette Baum)