TTAC Commentator sastexan writes:

Sajeev,

I’ve been driving cars requiring premium fuel (91+ octane). When I bought my Contour SVT in 1998, high test was $0.20 more a gallon (just under a 20% premium over regular). But it was regularly always only $0.20 more. In the past decade or so, I noticed the delta going to $0.30 and even more. The correlation did not seem to be to the price (eg, premium did not seem to track a consistent 15% increase). Rather, the difference appears to be a flat rate.

Question for the best and brightest – what in higher octane fuel makes it more expensive?

What inputs are there and how much more does it cost to manufacture? (Read More…)