Diesel

billyboy · 11-26-2006, 05:58 AM

Can somebody give me a reason for why diesel fuel is now as expensive as gasoline? Is it just supply and demand? Diesel used to sell for considerably less than gasoline if I remember correctly, (which isn't always the case). I thought that a barrel of crude would yield more diesel than gasoline also.

billyboy · 11-26-2006, 06:39 AM

I found the answer,so disregard.: As noted above and in the section on demand, U.S. demand is centered on light products, such as gasoline. As shown in the graph, refiners in the United States more closly match the mix of products demand by using downstream processing to move from the natural yield of products from simple distillation, illustrated earlier, to the U.S. demand slate, illustrated here. After simple distillation alone, the output from a crude oil like Arab Light would be about 20 percent of lightest, gasoline-like products, and about 50 percent of the heaviest, the residuum. After further processing in the most sophisticated refinery, however, the finished product output is about 60 percent gasoline, and 5 percent residuum. The oil companies get the double bonus here. More high priced gasoline from lower priced diesel while at the same time making diesel less available and therefore making it higher priced too

It's always fun to answer my own posts

fastpat · 11-26-2006, 06:58 AM

The US government's military is using diesel like there's no tomorrow (for example the US Army has no gasoline tactical vehicles today) and the requirement for low-sulphur diesel has raised the cost of production.

legion · 11-26-2006, 08:23 AM

Around here, gasoline is $2.00 and diesel is $2.79...

speeder · speeder's Garage

Quote:

Originally posted by fastpat
The US government's military is using diesel like there's no tomorrow (for example the US Army has no gasoline tactical vehicles today) and the requirement for low-sulphur diesel has raised the cost of production.

Bingo. Along with every other aspect of our foreign policy that is just an unbelievable destruction of life, property and financial resources, comes this added benefit. Millions and millions of gallons of a non-renewable resource burned and a nice additional tax on every person in the world who consumes anything they did not grow in their yard. But the oil companies are benefiting, so it's not a total loss.

VINMAN · 05:38 PM

3 months ago, diesel was 40 cents cheaper than regular, now it's 40 cents more. A buddy of mine that works for Hess, says it is also because of the winter demand for heating oil, which is basically diesel.

dd74 · 11-26-2006, 12:47 PM

Yes, I would think the winter oil demand. But what the hell would I know about winter oil?

legion · 11-26-2006, 05:36 PM

Diesel has been $0.20 over premium around here for as long as I can remember, and I sold my diesel MB in 2000....

fastpat · 11-26-2006, 06:22 PM

Quote:

Originally posted by legion
Diesel has been $0.20 over premium around here for as long as I can remember, and I sold my diesel MB in 2000....

I bought my diesel pickup in the fall of 2003, even in CA diesel was 10-20 cents cheaper than 87 octane gas. By the next summer that had changed, and now diesel is showing no sign of ever being lower priced.

Joeaksa · 11-26-2006, 07:19 PM

One thing to remember is that diesel is one or two steps up the refinement tree from light oil. Gasoline takes a lot more steps to refine, thus more expensive to produce.

Diesel is more expensive than gasoline for one reason. TAXES.

billyboy · 11-26-2006, 07:47 PM

Quote:

Diesel is more expensive than gasoline for one reason. TAXES.

It was not 10 years ago. Have they added more taxes to diesel in that time frame?

5axis · 11-26-2006, 08:16 PM

http://www.api.org/policy/tax/stateexcise/upload/october_2006_gasoline_and_diesel_summary_pages.pdf

go to P 3 and 4. Illinois is 2nd in diesel taxes and Ca is 3rd.

I try to fuel up at the borders whenever possible.

CurtEgerer · CurtEgerer's Garage

>>>The US government's military is using diesel like there's no tomorrow (for example the US Army has no gasoline tactical vehicles today) and the requirement for low-sulphur diesel has raised the cost of production.<<<

The military is not driving diesel prices. The US Military represents less than 2% of the United States fuel usage. Moreover, this war has been going on for 5 years. The highest fuel usage would have been during mobilization at the beginning. Nothing has happened in the last several months that would have increased military diesel usage from what it has been for 5 years!

Diesel prices are not driven by the same market forces as gasoline and the movement in their respective prices is not directly comparable. Have other petroleum-based products come down in price along with gasoline - i.e. plastics, lubricants, roofing shingles, candles, etc.