The increasing price difference between regular and premium gasoline in Canada can be attributed to a combination of factors related to production costs, demand and supply dynamics, and regulatory considerations. It’s always a good idea to stay informed about these factors to understand the fluctuations in gasoline prices.
Octane Levels:
Premium gasoline has a higher octane level than regular gasoline1. The higher the octane level, the slower the gas burns, which makes it less likely to ignite prematurely—sometimes causing “knocking” or “pinging”—which can damage the engine1. This makes premium gasoline more suitable for high-performance engines.
Production Costs:
Fuels with a higher octane content are more expensive to refine and cost more to store and distribute due to lower demand2. These added costs are passed on to consumers at the pumps when they choose a higher-octane fuel2.
Supply and Demand:
The price of gasoline is also influenced by demand and supply factors. For instance, geopolitical tensions can affect the supply of oil and gas, leading to price increases3. Additionally, seasonal factors such as spring break travel and warmer weather can increase the demand for gasoline, leading to price hikes.
Regulatory Factors:
Other factors such as regulatory risks, more rigorous environmental reviews, and political obstacles can make oil and gas projects more expensive, which can also contribute to the rising price of gasoline.