Why Premium Prices for Premium Gas?
Question: You have written in the past about the difference between regular and premium gasolines. But you haven’t explained why there is usually a price differential of 12 cents to 18 cents between regular unleaded and super unleaded. Is that price differential justified?--D.C.K.
Answer: Under the laws of capitalism, it is justified. Whether it makes sense is something else. The wholesale spread between regular and premium, meaning the price differential when the refiner sells it to the gasoline retailer, is about 5 to 10 cents. The additional mark-up by retailers is mostly a function of what they think the market will bear.
Typically, profit margins on premium are higher than on regular. Common sense suggests that motorists buying premium have bigger and more expensive cars. They probably can afford to pay more and they are more finicky about the gasoline they buy.
The reason the refiner charges more for premium has to do with the refining process. In the past, premium fuel was obtained by adding lead to boost octane. But environmental laws severely limiting lead and new engines that burn unleaded fuel has forced refiners to find more costly methods to boost octane. The higher-octane unleaded fuels are produced by first distilling crude and then cracking and rearranging the gasoline molecules.
The extra refining reduces the yield of gasoline from the crude. If you were to start with a given amount of crude, you would end up with a smaller quantity of premium gasoline than regular gasoline. That reduction and the additional refining required is the basis for the higher wholesale cost.
Q: I have a 1986 Ford Taurus with a four-cylinder engine. Ever since I bought it, it has been leaking or burning coolant. I had it at the dealership nine times; so far they have replaced the head gasket three times and the water pump twice. They also replaced the hoses. Right now, it’s back at the dealer for the 10th time, and they said a pressure check showed there is no leak. But I still put in two quarts of coolant every 1,200 miles. So, they have offered to resurface the head. The car will be out of warranty soon, so I need some help. What’s the problem?--C.S.
A: There are several important things that the dealer should be aware of. First, the head gasket for your engine has been revised under a service bulletin to dealers. The bulletin number is 88-8-8. Ford also issued a caution to dealers in another service bulletin (88-18-7) that explained how engine overheating can be caused by an improper engine rebuilding procedure.
It would also be helpful for you to find a dealer who is equipped and knows how to use the Oasis onboard computer. Almost all the dealers have the equipment to use them, but apparently not everybody is fully competent.
The leak test on the radiator should have been one of the first things that the dealer did, well before replacing the head gasket and water pump. Hopefully, the mechanic there has also checked to see if oil is getting into the coolant or coolant into the oil, which is typical with a bad head gasket.
Finally, you should ask to speak with a Ford Motor representative or call your local Ford factory office. A competent service department should not require 10 visits to fix a relatively simple problem like coolant leak. As for your warranty, since the problem occurred while the warranty was in effect and the dealer was unable to fix the problem, the additional repairs should be done under the warranty. Most states have warranty laws that give consumers that protection.
Vartabedian cannot answer mail personally but will respond in this column to automotive questions of general interest. Do not telephone. Write to Your Wheels, You section, The Times, Times Mirror Square, Los Angeles 90053.
