In this episode of Sound Off, Joe Perino discusses the often-asked question:
‘Is Premium Gasoline Worth It?’
Topics in this episode include a discussion on the difference between premium and discount gasoline and what exactly is ‘premium gas’.
Additionally, Joe gets into octane, pre-ignition / knocking, RON vs MON. The refining processes that affect octane levels are also discussed as well as how different types of crude affect the process.
Finally, he dives into additives, property enhancers, detergent control and what makes ‘top-tier’ gasoline.
Listen to Sound Off with Joe Perino below:
Links:
Intertek – Automotive Research
Oil 101 – A FREE Introduction to Oil and Gas
EKT Interactive Oil and Gas Podcast Network
Upstream and Downstream: Learn the difference
Transcript:
Is Premium Gasoline Worth It?
Hello. I’m Joe Perino, and welcome to Sound Off. This podcast is part of the EKT Interactive Learning Network and is brought to you by Oil 101, a free 10-part introduction to the oil and gas industry.
Today we’re going to try to answer the question, “Is premium-branded gasoline worth it?” I thought this would be a fun topic and an interesting one because all of us are drivers and we fill up every day at gasoline stations and convenience stores. We have to ask ourselves the question, “Is it worth paying more for a premium-branded gasoline than it is at a discount station?”
The first thing is what is a premium-branded gasoline? I’m here in the Houston area, and we have 2 brands that are considered premium-branded gasolines. One is Shell’s V-Power Nitro Plus Premium and the other is Chevron’s Techron. To answer the question, we need to ask ourselves, “What is premium gasoline?” We know, when we go to the pump, regular gasoline has an octane number of 87, mid-grade is 89, and premium is usually 93; although it may be 91 through 94, depending on where you are in the country.
What just is an octane number? The octane number is a measure of the fuel’s resistance to knocking or to pre-ignition. Let me explain. The modern gasoline engine has 4 strokes. On the first stroke, the fuel-air mixture is drawn into cylinder head area. On the second stroke, the fuel-air mixture is compressed. On the third stroke, the spark plug fires, ignites the mixture, the mixture expands, driving the piston down. On the fourth stroke, the piston returns upward, pushing the exhaust gases out of the engine.
Pre-ignition can occur during the compression stroke. The heat of the compression can pre-ignite the mixture prior to the spark plug igniting the mixture in the third stroke. Premium gasolines are formulated so that the mixture will not pre-ignite.
There’s another aspect to this, and that is cars that require premium gasoline typically have higher compression ratios than cars that use regular gasoline. These ratios are usually higher than 10 while those burning regular gasoline are 8 to, say, 9-1/2. This is the reason why cars need premium gasoline. Although with modern sophisticated fuel injection and computer controls, most cars that need premium gasoline can burn regular gasoline without any problem.
Now there’s another aspect to the octane, and that is the octane at the pump actually consists of 2 octane numbers: the research octane and the motor octane. The research octane number is obtained from an engine test at 600 RPM with light load. The motor octane number is the same test at 900 RPM, but with higher loads to simulate actual driving conditions. We take those 2 numbers and add them together and divide by 2, and we get the octane number at the pump – the 87, the 89, or the 93.
We might say, “How do you get 87 octane gasoline and 93 octane gasoline at premium?” To do that, we need to talk a little bit about the refining process. I don’t want to get too technical or get into the chemistry, but I will provide a brief explanation.
When crude oil is brought into a refinery, it is processed through the crude unit. This is a distillation unit. At various distillation points or cuts, we take products off that tower. One of them, the one at the top, which is liquid, is called straight run gasoline or straight run naphtha. That has an octane of about 70. You can see that we need to do something with that 70 octane naphtha to get it up to 87, which is the octane at the pump. To do that, we process it through other refinery units. The first one being the catalytic reformer, which raises it up into the 90s. There may be other units in the refinery that are also providing gasoline. Those include the fluid catalytic cracker, the hydrocracker, the coker, and the alkylation unit.
There’s another way to raise the octane of the gasoline, and that is through the use of a fuel additive, such as ethanol. In addition, it depends on the type of crude that you’re running at the refinery. If you run a light crude, you’re going to yield a higher percentage of straight run naphtha. That means you’re going to need to have more additives or more of the other types of refinery blend components to raise the octane up to 87. In the case of premium gasoline, the octane to 93. That typically costs more. Either the refiner has to have more higher octane-producing units or it has to add more additives to it.
We know today that ethanol is the additive that is being used to raise the octane of the gasoline, but it is limited to 10%. Typically, when you run the medium and lighter crudes through a refinery, you’re going to need other refinery units that provide high octane blend components in addition to the ethanol. That typical unit that provides that is the alkylation unit. About 10% of the gasoline pool comes from alkylation.
We have to ask ourselves, “How much more does it cost to make premium gasoline versus regular?” That is dependent on the refinery configuration, the type of crude, the operating costs, the additives, the formulation for the gasoline, whether it’s summer or winter, and a number of factors. Without doing a specific calculation, the research literature I’ve seen reports that alkylate is about 15% more costly than the balance of the gasoline pool.
Let’s translate that and say that it comes out to be 10 or 20 cents per gallon more expensive as a blend component to raise the octane. That means that what a refiner wants to do is they want to use the cheapest components to get to 87 octane or to get up to 93 octane as they can and use as little of the most expensive blend components. They’ll typically blend gasoline and use all the ethanol they can and then use the most expensive high octane components like alkylate, which has an octane number in the 90s, to raise up and produce premium gasoline. By the way, mid-grade gasoline at today’s modern pumps is simply a mixture of the regular gasoline and the premium. They don’t actually make mid-grade gasoline anymore. They blend it at the pump.
The next section we should talk about is aren’t all gasolines the same? What are these gasoline additives that we put in gasoline? In the largest sense, all gasolines are the same. What makes a gasoline different is the additives that go in it. There are basically four types of additives that go in gasoline. The first is the octane enhancer to raise the octane level.
I mentioned ethanol. We’re using a lot of that now, but years ago we used to use something called tetraethyl lead, but the lead was phased out. Then we started to use other octane enhancers called ETBE, TAME, and MTBE. These are the letters that are the names of the chemicals that were put in gasoline to raise the octane. Those last three that we mentioned are also called oxygenates. Oxygenates are there to reduce the amount of carbon monoxide produced when the gasoline is burned in your engine.
Some additives like ethanol are both an oxygenate and an octane enhancer. Interestingly enough, with ethanol, even though it has a high octane number, it actually adds less energy to the gasoline. Since it’s also difficult to handle, it’s toxic, it’s difficult to transport, and it’s corrosive, gasoline engines today are typically limited to 10% ethanol in the gasoline.
The next two areas are called property enhancers and then finally detergent control additives. The property enhancers deal with lubricity, with corrosion, with the color of the fuel – they actually dye the fuel a color – antioxidants, and stabilizers. These are there to give the fuel properties when it’s cold, when it’s hot, for different types of use, whether it’s used in automobiles, it’s used in the marine area, it’s used in commercial areas.
The last area is the most important area from our view of additives, and that’s called detergent control. Now the history of detergent control additive goes back to the 1970s when the EPA was formed. The EPA said you need to have a detergent control additive to reduce the emissions produced by the combustion process in gasoline engines. The first performance standards were established by the EPA in 1995. They said, “You have to have a minimum level of detergent additive in order to meet our standards”. That was when all gasolines had a base level of detergent control additive.
We know, of course, today that we have gasolines that have more additives than others. That’s what differentiates gasolines today. The minimum additive came in in ’95. That additive was based on a chemistry called PBA or polybutylamine. I won’t get into an explanation of what that chemical is, but that’s the base chemical in most of the additives today and that’s the base chemical in the minimum EPA requirement.
Other people manufacture other types of additives that are also a means, but they have a different chemistry. For example, Chevron uses polyetheramine or PEA chemistry. Shell actually doesn’t explain the details of their chemistry, but it also is designed to clean your engine better just like Chevron’s Techron is.
Some gasolines have more than the minimum amount of detergent control additive. For example, 76 fuel, which is manufactured by Phillips 66, has 3 times more DCA or detergent than the minimum required by the EPA and 30% more than the minimum required by top-tier detergent gasolines. I’ll speak in a moment about what top-tier gasolines are.
Another example is Marathon. Marathon gasolines feature STP additives that give you extra cleaning power. They say they have 2 times, or more than 2 times, the required minimum of detergent additives. It’s difficult for a consumer to know what the difference is between how much additives are in gasoline and how much are more than the minimum and which one is best.
Another question you might ask is, “Who makes these gasoline additives?” Well, there are four primary manufacturers of additives for gasoline, but, in reality, there are actually dozens of them. The leading manufacturers of the gasoline additives are Chevron. Another company is called Infinium, which is a joint venture of ExxonMobil and Shell. The the third is lubrizol, which is actually owned by Berkshire Hathaway. The fourth is called New Market, which is a combination of the old Ethyl Corporation and Afton Chemical. These provide the majority of fuel additives for gasolines in the US.
Now earlier I mentioned the term “top-tier gasoline”. What is that? There’s a little history behind that. General Motors started this top-tier campaign in 2004. It was voluntary and it’s open to all the automobile manufacturers and refiners who make gasolines in the the US and Canada. Top-tier gasolines are not just about the amount of detergent control additive, they also specify a number of other parameters on the gasoline based on tests that they have to pass in order to be called top-tier. They have to have a certain volume limitation of ethanol, a certain percentage of olefins, a certain percentage of aromatics, et cetera. I won’t get into the chemistry, but the point is that it’s more than just the detergent additives. They actually have to have their gasoline tested in order to be top-tier.
Who are members of the top-tier group? Who also are suppliers of that gasoline? In addition to General Motors, you have BMW, Fiat Chrysler, Honda, Toyota, Volkswagen, Mercedes, and Audi in the group of auto manufacturers. It’s also interesting to note who isn’t in the group: Ford, Porsche, Land Rover, Jaguar, Nissan, Hyundai, Kia, Mitsubishi. We’re assuming that Lexus and Acura are included because of Toyota and Honda.
Who are in the list of top-tier gasoline retailers? Of course, it includes most of your majors: 76, Arco, BP, Chevron, Texaco, Mobil, ExxonMobil, et cetera. Interestingly enough, it also includes some of the large, independent retailers like CountryMark, Senex, Quiktrip. It includes Costco, but it does not include Walmart or Kroger or Sam’s Club. You can go on a website and find out who’s on these lists at TopTierGas.com.
Why not all the automobile manufacturers and why all the gasoline retailers have joined this, we don’t really know. There is a cost to actually go have your engine tested, your fuel tested on engines, to have this done. The literature tells me it’s $30,000 or $50,000 to do this, which would seem to be a small amount if you’re a major gasoline retailer or one of the automotive manufacturers.
What’s behind testing of the gasoline? This is an interesting thing because I happen to used to call on the 2 major testers of fuels and motor oils here in Texas. They’re both located in San Antonio. One is the Southwest Research Institute and the other one is called the EG&G Automotive Research Group. They’re now owned by Intertek.
Years ago, I used to go and sell them instrumentation – flow, pressure, temperature, level, and other instruments that were instrumented around an engine. They actually had a test lab, or several test labs, where they had 30 to 50 engines in a row setup in a test mode, instrumented to run these gasolines and also to test motor oils. They would collect all the data and analyze the engine and the impact on the engine. They were looking for the valves, the fuel injectors, the deposits on the pistons, and so forth. They would examine all of these things and then produce a report.
What I’m leading to is to answer the question, “Do these additives make a difference?” It appears from the literature that on a test basis, they do make a difference. Now the real question is do they make a difference in everyday driving?
I did a little investigation there to see from a practical viewpoint. There’s even a guy on YouTube that took a camera to a 6-cylinder engine, photographed the cylinder heads, and then ran not once, but twice 2 cans of Techron concentrate through the engine, 1 tank of gas each. Then went back in with the cameras and photographed the top of the piston head. He did find there was some improvement in terms of removal of the carbon deposits, but not anywhere near as much as the manufacturer of the additive claimed. Obviously, this was not a controlled experiment in the lab, but what I find out there in the literature is that there doesn’t seem to be a conclusion as to how much of a difference this really makes in your engine.
Now what does all these lead to? The bottom line, and in the literature – I mentioned the literature – one website is the Society of Automotive Engineers. They say basically some gasolines tend to form more deposits than others. Deposit formation is also affected by vehicle operating conditions and by the design of the fuel injections systems and the engines. That makes it very difficult for us, as consumers, to really tell whether or not this is going to make a difference, again, particularly in modern cars, which have sophisticated fuel injection systems and computers that can adjust for octane number, for dirty air filters, and all the other factors that are involved in everyday driving.
Let’s run some numbers. I decided to take a look at 3 scenarios. One, where you buy the cheapest premium gasoline; the second where you by the cheapest premium, but you add in an additive periodically; and the third is to gas up every time at the premium-branded station.
I’ve seen gas prices vary around Houston, as much as a dollar between stations, and as much as a dollar between regular and premium at the same station. In fact, for the example, I took 2 stations that are within 3 miles of my house. One is a Chevron, where regular is $1.69 and premium is $2.69, and a Kroger, where regular is $1.55 and premium is $1.75. There’s a 20-cent gap at the Kroger and a 94-cent gap at Chevron.
Then I said, “Let’s take a look at what Chevron Techron concentrate costs.” I went on Amazon and I went on Walmart. I could pick up a 12-ounce bottle for about $8.35. STP and some of the other additives are similar. That can of Techron concentrate fills up a one 15-gallon tank and you’re supposed to use it every 3,000 miles.
If we assume an automobile gets 20 miles to the gallon and when you fill up, you fill up with 15 gallons; every few thousand miles, we’ll use about 150 gallons of gas. Fine. We take the $8.35, we divide it by the 150 gallons, and we get about 5-1/2 cents per gallon. STP and the other additives are generally less expensive than Techron, so that’ll be a few cents less. This would tell us that going to the premium-branded station should only cost 5, 6, 7 cents more than the non-branded station, the cheapest gas.
If we take a look at the Kroger versus the Chevron, we see that I can go to Kroger and pay $1.75 for premium and add another 5-1/2 cents by adding the Techron concentrate. If I go to the Chevron station, I’m going to pay $2.69 versus what would effectively be $1.80, $1.81, $1.82. That’s quite a gap.
Finally, what can we take away from this analysis? First, we know that premium gasoline does cost more to make and distribute, particularly in the summer months. Second, we know from test results that branded gasoline additives appear to provide superior results, but we also know that it’s very difficult for consumers to tell this difference in everyday driving. Third, it appears to be much less expensive to add a premium-branded aftermarket additive, like Chevron’s Techron, than it is to gas up every time with premium-branded gasoline. Fourth, one could compromise and fill up with another top-tier gasoline that isn’t a premium-branded one, so that you did get more than the minimum amount of EPA, detergent control additive and only pay a slight premium to the cheapest gasoline.
Finally, what do you do, Joe? I buy the cheapest gas and add the additive on a periodic basis. That seems to work out well for me. I do have a vehicle that requires premium gasoline. So far, I’ve been able to do that without any problems. If you have a question or a comment, we’d like to hear from you. Thank you for listening.