The American Automobile Association (AAA) recently studied gas-buying behavior of U.S. motorists, finding that more than 7% of us (16 million out of approximately 210 million) use premium gas when our cars don’t need it. It has been known for decades that putting premium gas (90+ octane) in cars designed for regular (87+ octane) has no effect on performance, gas mileage, or engine life. Buying premium for a car that doesn’t need it is a serious waste of money, but at the same time motorists save only a few cents per gallon when they do not buy Top Tier gas, which does affect all of the above measures.
It’s tough to be a consumer. From the 19th Century, when quacks sold 100-proof panaceas from medicine wagons, to today, when Big Pharma spends billions convincing us to tell our doctors what prescriptions we need, we have been lied to about everything from drain cleaners to laxatives; from infant formula to hospice services. However, there are two relatively constant rules to guide us: TANSTAAFL (There ain’t no such thing as a free lunch) and PIQ (Price indicates quality).
Merchants do not give away their products. In the Good Ol’ Days, bars offered free lunches to patrons. This was not altruism, but opportunism. Bars made their money selling alcoholic drinks; the lunches were a come-on. Casinos give free drinks to gamblers for the same reason.
There is a fairly close correlation between price and quality. As between two similar products, if Acme’s product sells for a higher price than Excelsior’s, the fact that many consumers see Acme’s product as of superior reliability, appearance, or value retention, indicates that the product probably is of objectively higher value.
These principles break down when it comes to gasoline grades. “Premium” gas is not better gas. It has a different application. “Regular” gas is as good as premium when used in a car designed to run on lower octane fuel. Part of the problem may be that higher-octane gas is called premium when it is not qualitatively better than regular. If the manufacturer does not specify a higher octane, there is no benefit to spending the extra money for premium, according to John Nielsen, AAA’s managing director of Automotive Engineering and Repair.
Filling up with premium instead of regular can be quite expensive. While the price differential used to be 10 – 15%, in some regions it can be close to 50%. When it comes to gasoline, ‘premium’ does not mean ‘better’ if your vehicle doesn’t require it,” continued Nielsen. “Drivers looking to upgrade to a higher quality fuel for their vehicle should save their money and select a TOP TIER™ gasoline, not a higher-octane one.” Erin Stepp, “U.S. Drivers Waste $2.1 Billion Annually on Premium Gasoline” (AAA NewsroomSeptember 20, 2016),”
Top Tier retailers include 76, Aloha Petroleum, Amoco, ARCO, Beacon, BP, Break Time, Cenex, Chevron, CITGO, Conoco, Co-op, Costco, CountryMark, Diamond Shamrock, Entec, Esso, Express, Exxon, Holiday, Kwik Star Stores, Kwik Trip, Mahalo, MFA, Mobil, Ohana Fuels, Petro-Canada, Phillips 66, PUMA, QT, Quik Trip, Road Ranger, Shamrock, Shell / Shell V-Power, Sinclair Standard, SuperAmerica, SuperFuels, Tempo, Texaco, Tri-Par, and Valero. Jeff Bartlett, “Study Shows Top Tier Gasoline Worth the Extra Price.” The latest roster of Top Tier brands may be found on the Top Tier website.
It makes sense to pay a nickel a gallon more for Top Tier gasoline, which protects the engine better than a non-Top Tier product. However, paying a large price differential for premium for a car does not need it is a huge waste.
There is a caveat concerning Top Tier gasoline. According to the Top Tier website, the product is endorsed by eight major auto manufacturers as increasing engine life, gas mileage and performance. This may all be true, but the consumer never really knows. They could also claim that Top Tier gas reduces the risk of stroke or heart disease and cures hypertension and an ordinary motorist could not prove them wrong. Still, the relatively small price differential makes the risk that it is just a marketing gimmick acceptable.
John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
©2016 John B. Payne, Attorney