Cost-conscious Utahns are passing the premium pump and reaching for regular since gasoline prices have gone up the past four months.
Amoco Oil said sales of premium unleaded gasoline at its Salt Lake refinery have been off between 40 to 50 percent, compared to the same time last year. Chevron U.S.A reported an 18 percent decline since August. The Utah Petroleum Retailers Organization estimates premium sales are down 25 percent from last year."High prices have scared people away from premium," said Randall Couch, Salt Lake manager for Amoco.
Slack demand for premium means less money for oil refiners and service station operators because premium is more profitable than other grades of fuel. Refiners make about 7-8 cents more per gallon on wholesale premium and service stations make about 2-3 cents more per gallon at the pump than they would selling regular unleaded fuel.
But refineries and service station operators have attempted to make up the difference by:
- Replacing leaded fuel where possible with a mid-grade unleaded - often called "plus" - about 5 cents less per gallon than premium, compared with the 10-cent difference with unleaded regular.
Mid-grade unleaded also has a lower octane level than premium. But a spokesman for Ford Motor Co. said changing from premium to a lower grade shouldn't cause engine problems as long as the fuel has an octane level of at least 87.
- Keeping upward pressure on the price of leaded regular, unleaded regular and mid-grade fuels. But stiff competition makes this difficult to sustain, particularly during winter when overall demand for gasoline is off.
Prices typically fall during the winter as competition heats up to capture the decreasing number of gallons sold. Couch said that competition kept everyone from passing the recent 5-cent federal fuel tax hike on to consumers. The price of unleaded regular at many service stations Friday was at or below the price before the tax hike became effective Dec. 1.
He said that unlike past holidays, this Christmas season shows pump prices decreasing.