Record US Premium Gasoline Means Luxury Car Owners Paying Up

Chunzi Xu, Bloomberg News

AUCKLAND, NEW ZEALAND - APRIL 27: In this photo illustration a petrol pump is seen April 27, 2006 in Auckland, New Zealand. Petrol prices have risen again for the fourth time in less than a month, this time by up to five cents taking the price of 91 octane fuel to 170.9 cents per litre while premium reached 175.9 cents per litre. (Photo illustration by Phil Walter/Getty Images) , Photographer: Phil Walter/Getty Images

(Bloomberg) -- The price gap between premium US gasoline and regular grade is nearing the highest ever. That’s bad news for owners of most luxury cars who are forced to pay up for the fancier fuel.

Premium gasoline was around $4.17 a gallon on Sunday, 76 cents higher than regular fuel, near a record high spread, according to data from the American Automobile Association. While US gasoline prices are falling overall, premium remains elevated as producers are paying more to get the required higher octane content.

Owners of non-luxury cars usually fuel up with the cheaper stuff, but most higher-end models including Mercedes-Benz and Lexus need premium gasoline.

US gasoline makers are blending in naphtha and a record amount of natural gas liquids, low-octane components, according to data from the US Energy Information Administration. It’s allowed the US to extend gasoline production and maximize diesel fuel amid a global shortage, according to Chris Barber, an analyst at ESAI. But it’s also made premium fuel pricier: Producers now need to mix more octane boosters, such as alkylate, to get the premium grade. Meanwhile, the price of alkylate jumped more than 20% in November compared with a year ago, according to data from price reporting agency Argus Media.

Unfortunately for luxury car owners, they’ll likely continue to see hefty premiums for high-octane fuel in the months to come, because winter gasoline has more butane in it that requires even more alkylate to offset.