Octane is regulated in various regions and countries using different approaches. Many countries establish minimum RON and MON levels for gasoline, whereas AKI is typically used in the Americas. Generally, it is required that refueling pumps indicate the octane level being sold as vehicle technologies require different octane and one or more grades can be found at the pump. Stratas Advisors is pleased to present current market octane share by country, which includes historical data dating as far back as 2010 and has been updated since the last report (see Insights, Sept. 30, 2021).
Notably across the world, current gasoline octane grades range widely from RON 80 to RON 110, or AKI 81 to 91 in the Americas. Several countries have two or more grades available on their markets, while a number of African countries have only one gasoline grade on their markets including Nigeria (RON 91), Libya (RON 95), etc. Currently, Indonesia has the highest number of gasoline grades in the world with a total of six grades. In addition, two countries of Peru and Russia have as many as five gasoline grades on each of their markets. Furthermore, five countries of China, Iraq, Kyrgyzstan, Paraguay and Philippines have at least four gasoline grades available on their markets. Over the past couple of years, countries like Kazakhstan, Tajikistan and Ukraine have reduced their number of grades from five/four to three, due to the phase out of lower octane grades like RON 80.
Generally, it is observed across the world that regular grades have an octane rating ranging from RON 80 to RON 97 (or AKI 81 to 87), while premium grades have an octane rating ranging from RON 90 to RON 110 (or AKI 87 to 91). For example, the regular grade in Europe is often RON 95 while in the CIS, it ranges from RON 80 to 95. Regular grades often dominate the gasoline pool due to their cheaper price, and are thus more popular with consumers.
Exceptions apply to the following nine countries, where their premium grade gasoline is found to be more popular than regular grade gasoline: Brunei, Dominican Republic, Honduras, Jamaica, Nicaragua, Oman, Panama, Qatar and Thailand.
Lower Octane Gasoline Grades
Lower octane grades, with octane number lower than RON 90 or AKI 85, are still available for use in motorcycles, very old vehicles or off-road applications such as fishing boats, agricultural machinery or small spark-ignition engines of non-road mobile machinery (NRMM). They are continued to be used primarily in the developing regions of Africa, Latin America, Russia & CIS and parts of Asia Pacific and the Middle East. For example, in Indonesia, RON 88-89 is used primarily by motorcycles. Low octane gasoline grades fully dominate the gasoline pools of Bolivia and Yemen, while they account for the majority of gasoline pools in Colombia, Ecuador and Iran.
Generally, these are the reasons behind the continued use of lower octane grades:
- Availability of a cheaper grade to consumers as compared to higher octane grades which are more expensive. This applies to several developing countries;
- Old refineries with slow or no upgrades are not able to increase octane without compromising gasoline supply, and have chosen to keep the octane limit low;
- Lack of domestic supply of octane enhancers (e.g. CIS countries); and
- They act as a protective grade for very old on-road vehicles especially those in the developing countries. For example, Egypt has vehicles as old as 50 years old and continues to have RON 80 available on its market.
However, a number of countries have phased out gasoline grades with octane levels lower than RON 90, or replace them with higher octane grades. Countries of Egypt, Indonesia and Peru also plan to gradually or eventually phase out gasoline grades with octane levels lower than RON 90, while market share of RON 80 is continuing to decrease in the CIS countries of Kyrgyzstan, Russia and Uzbekistan.
On May 22, 2021, the government of Peru passed Decreto-Supremo-014-2021-EM to establish a national requirement for the use of 50 ppm sulfur gasoline, gasohols and diesel commercialized across the country. Moreover, the decree provides an exception for the continued use of low octane gasoline and gasohols (<RON 95) in the Departments of Loreto and Ucayali. Additionally, the decree allows for the temporary use of gasoline with RON 84 in the Departments of Amazonas, Loreto, Madre de Dios and San Martin until June 30, 2023; whereby the gasoline will be identified as G84 on the corresponding equipment. In view of the above, Stratas Advisors observes a decline in Peru’s use of RON 84 over the years starting from 2015 when its share was 47.8% of total gasoline sales, dropping to 10.5% currently (see figure below). The lower octane grade is mostly replaced by RON 90 and RON 95 grades, whose shares have increased over the same period.
Historical Octane Market Share in Peru
Source: Stratas Advisors, September 2022