Why is 85 octane gas cost as much in one state cost the same as 87 octane in other states?

Question

As a rule in traveling to other states, I have found that states where octane rating for regular unleaded gasoline is 87 cost, on average, the same as 85 octane gas in other states where that is the rating for regular unleaded. Why should this be? Shouldn't it be proportionally lower in cost?

As a rule in traveling to other states, I have found that states where octane rating for regular unleaded gasoline is 87 cost, on average, the same as 85 octane gas in other states where that is the rating for regular unleaded. Why should this be? Shouldn't it be proportionally lower in cost?
In Utah, they refine their own gasoline, for example. So transportation costs are not a factor.

Answer 1

Different states tax gas at different rates. For example, gas in GA is 30 cents cheaper than MI.

Answer 2

If you're comparing 85 octane to 87 octane, you're generally looking at the Rocky Mountain States. The one I visit most often is Colorado, entering either through Nebraska or Kansas and I've noticed the same thing.

People will offer up any number of reasons, the only people that can really answer are the gas companies, and I doubt very much they will ever tell you.

When comparing 85 Octane, to 87 Octane, the gas companies can make a number of arguments, for example, 85 Octane is more of a niche market, it isn't produced in the quantities that other octanes are, and because of the limited market, the price is higher. This begs the question though, why is 87 octane more expensive in Rocky Mountain States.

The only answer that really has any chance of success is "transportation costs." Most oil/gas is moved in pipelines. The reason 85 octane is allowed in Rocky Mountain states is because it burns as clean at higher altitudes as 87 octane does at lower altitudes. The rise in altitude requires a lot more pumping equipment on those pipelines though, more energy to run the pumps, and more maintenance to keep them going. The idea that the pumping costs are $0.10 a gallon though is absurd.

In certain parts of the state, special blends are mandated to fight smog, much like in California. If this were true statewide, it might also produce a valid argument for higher prices, but it's not a state mandate, and so once again, the argument falls flat.

The gas tax in Colorado is actually $0.22/gallon compared to $0.25 in Kansas and $0.28 in Nebraska. Gas prices should go down when you enter the state for comparable gasoline.

So the truth is, in my opinion, they do it because they can. People expect 3 grades of gasoline, and they look for consistency in price between the 3 grades. Most people don't pay much attention to the octane. The oil companies take advantage of people’s complacency.

Answer 3

In addition to the above answers, different states may require different gasoline blends.

Also, at least two states (last I saw) do not allow self-service gasoline pumps, and that idiotic effort to protect the holy jobs of gas station attendants makes their gas more expensive.

Answer 4

A few different things:
differences in taxes
differences in what one company charges compared to another company.
differences in areas. ie prices for stuff in new york are going to be higher than the same stuff in some podunk town because of other costs including property tax, waste disposal tax, wages and so on.

Answer 5

shipping and state taxes contribute to the price