Why is premium gas so expensive? More Americans are filling their cars with it

Premium gasoline has become significantly more expensive in recent years, with the price gap between regular and premium fuel widening from just a few cents decades ago to nearly a dollar per gallon today. While higher refining and blending costs play a role, analysts say much of the increase is tied to retail pricing and market demand rather than wholesale fuel differences.

Historically, premium fuel was only about 20 cents more per gallon than regular gasoline. However, that gap began to expand in the mid-2000s and accelerated in the 2010s, reaching about 80 cents by 2022 and climbing further since then.

Demand for premium fuel has also grown, now accounting for roughly 13% of total gasoline sales in the U.S., up from 9% in 2013. One major factor is the rise in vehicles that require or recommend higher-octane fuel, particularly turbocharged engines in modern SUVs, trucks, and luxury vehicles.

However, experts note that many drivers who purchase premium gasoline do not actually need it. Octane measures fuel stability, not energy output, meaning higher octane does not improve performance in engines designed for regular fuel. Studies have shown that most standard engines see no benefit from premium gasoline.

Despite this, consumer perception and decades of marketing have reinforced the idea that premium fuel enhances performance. Industry analysts say this belief, combined with pricing practices at the retail level, has helped maintain strong demand and higher profit margins for stations selling premium fuel.

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