Gas vs. Diesel Prices?

[126coupe]

Driving around today I noticed diesel 25-30 cents less than regular, am I crazy, but wasn't diesel 25-30 cents more just a couple months ago??

[onlycafe]

not around here.
still 75 to 85 cents above regular gas prices.

[sammyg2]

There wasn't enough diesel available to keep the price down earlier this year so it was selling at a premium. Oil refineries scrambled and modified their plants to maximize diesel production (I know, I was one of those working on that).

Well, it worked. We all ramped up and now are over-producing which is driving the price of diesel down to the point where we are selling it for almost less than it costs to make.
It will stabilize.

[Arizona_928]

Originally Posted by sammyg2

We all ramped up and now are over-producing which is driving the price of diesel down to the point where we are selling it for almost less than it costs to make.

.50 a gallon?

[sammyg2]

Originally Posted by AZ_porschekid

.50 a gallon?

kid, take a good look at what a barrel of crude oil costs. Divide that by 42 (that's how many gallons there are in a barrel). That number represents what the raw materials cost. Add in things like labor, maintenance, about $11 million a month in utility bills for the average refinery, and you will now know what it costs to make a gallon of diesel fuel.
The refinery I work for processes around 4,010,000 gallons per day on average and has an operating cost of around $8 per barrel. If the finished product sell for $9 per barrel more than the crude oil cost, we make $1 per barrel or 2.3 cents per gallon.

The crude oil we are processing right now cost us around $100 a barrel (you have to order it and pay for it in advance). That means we paid $2.38 for a gallon of it.
It costs us about 19 cents per gallon to process it and turn it into a good clean fuel. That is very efficient BTW.

This means the diesel we are making right now, this very minute, cost us $2.57 to make. We are selling it for $2.12 for a grand total of ... drum roll ...... a 45 cent per gallon loss. howz that for gouging? .
The spot price in the LA harbor area right now for diesel is $2.12 a gallon wholesale. The difference between that price and the price you pay is called mark-up, and that is done by an independent distributor and retailer. Not an oil company.

It will settle down once crude stabilizes and we start getting deliveries of the cheaper crude, and once refineries stop over-producing diesel. Probably by spring.

If, if we were lucky enough to be be processing crude today that cost us $69 a barrel we'd be happy as hogs in shoot. We'd be making diesel that only cost us $1.83 a gallon to make and we'd be making 29 cents a gallon! Oh that would be nice, but it ain't reality. We can dream, can't we?
By the time the refineries start processing crude purchased at today's price, diesel will probably be selling for around $1.85 wholesale for a net profit of 2 cents.
maybe the big bad oil companies aren't so big or bad after all?

[GothingNC]

Diesal in my area is about $3.49 and hope it drops below $2.00 to drop my weekly TDI fuel costs to under $20 a week

[peppy]

Last diesel I bought was $3.329 in VA., gasoline was $2.889 in NC.

[Jim Richards]

Originally Posted by sammyg2

Well, it worked. We all ramped up and now are over-producing which is driving the price of diesel down to the point where we are selling it for almost less than it costs to make.

Despite all his character flaws, Sammy should earn sainthood for this.

Bring on the diesels!!!

[gr8fl4porsche]

Only a nickel difference here in St. Lou

[sammyg2]

Originally Posted by Jim Richards

Despite all his character flaws, Sammy should earn sainthood for this.

Bring on the diesels!!!

LOL, I was one of many who worked to increase our diesel producing capacity by around 280,000 gallons a day.
About two weeks after given the mandate, I walked into the senior production manager's office with a P&ID (process and instrument diagram, basically a process blueprint).
I pointed to a valve and told him that if we install a .130" diameter orifice in this warm-up line instead of leaving it wide open, we'll increase our diesel production by 28 gallons a minute without any control downside.

Doesn't sound like much but that's 14,700,000 gallons a year. The total cost for the modification was about 1500 bucks.
In return I was given an atta-boy plaque and a gas card worth $50

The paychecks ain't bad tho.

[sammyg2]

Originally Posted by GothingNC

Diesal in my area is about $3.49 and hope it drops below $2.00 to drop my weekly TDI fuel costs to under $20 a week

In new york harbor the wholesale low-sulfur #2 diesel spot price is $2.20 a gallon as of two days ago. In the gulf it's $2.13, In LA it's $2.12
That shows how much difference regional production capacity vs. demand can make.
In a month or so they should all be within a few cents of each other, well below $2 a gallon.
I don't think we'll ever see $2 a gallon retail again, but we might see $2.65 this winter for a short time.
If it ever gets to $2 retail I'd probably be out of a job because we wouldn't be able to afford to keep the place running.

[Jim Richards]

A plaque and $50 gas card? You've been raped! Well, no matter, we appreciate your contribution. Now, back to work, damnit!

[dheinz]

$3.59 for diesel and $2.89 for regular gasoline in western Pennsylvania...

[David]

Originally Posted by sammyg2

LOL, I was one of many who worked to increase our diesel producing capacity by around 280,000 gallons a day.
About two weeks after given the mandate, I walked into the senior production manager's office with a P&ID (process and instrument diagram, basically a process blueprint).
I pointed to a valve and told him that if we install a .130" diameter orifice in this warm-up line instead of leaving it wide open, we'll increase our diesel production by 28 gallons a minute without any control downside.

Doesn't sound like much but that's 14,700,000 gallons a year. The total cost for the modification was about 1500 bucks.
In return I was given an atta-boy plaque and a gas card worth $50

The paychecks ain't bad tho.

Too bad you don't work on Wallstreet, that would be good for at least a $5 million bonus.

[osidak]

paying $3.799 a gallon for diesel - looks like i am getting gouged if the spot price is $2.20

RUG is going for $2.799

[woodman]

Diesel $3.02/gal at my super secret west side ghetto location today...

[Arizona_928]

Originally Posted by sammyg2

kid, take a good look at what a barrel of crude oil costs. Divide that by 42 (that's how many gallons there are in a barrel). That number represents what the raw materials cost. Add in things like labor, maintenance, about $11 million a month in utility bills for the average refinery, and you will now know what it costs to make a gallon of diesel fuel.
The refinery I work for processes around 4,010,000 gallons per day on average and has an operating cost of around $8 per barrel. If the finished product sell for $9 per barrel more than the crude oil cost, we make $1 per barrel or 2.3 cents per gallon.

The crude oil we are processing right now cost us around $100 a barrel (you have to order it and pay for it in advance). That means we paid $2.38 for a gallon of it.
It costs us about 19 cents per gallon to process it and turn it into a good clean fuel. That is very efficient BTW.

This means the diesel we are making right now, this very minute, cost us $2.57 to make. We are selling it for $2.12 for a grand total of ... drum roll ...... a 45 cent per gallon loss. howz that for gouging? .
The spot price in the LA harbor area right now for diesel is $2.12 a gallon wholesale. The difference between that price and the price you pay is called mark-up, and that is done by an independent distributor and retailer. Not an oil company.

It will settle down once crude stabilizes and we start getting deliveries of the cheaper crude, and once refineries stop over-producing diesel. Probably by spring.

If, if we were lucky enough to be be processing crude today that cost us $69 a barrel we'd be happy as hogs in shoot. We'd be making diesel that only cost us $1.83 a gallon to make and we'd be making 29 cents a gallon! Oh that would be nice, but it ain't reality. We can dream, can't we?
By the time the refineries start processing crude purchased at today's price, diesel will probably be selling for around $1.85 wholesale for a net profit of 2 cents.
maybe the big bad oil companies aren't so big or bad after all?

thanks not everything can be learned in a school..

[gt350mike]

SammyG......Thanks for the insight!

BTW, Wally World/Murphy is selling diesel at $3.25 and another station (outside of the city) at $2.99. Its great to see diesel dropping in price but there are a few hold-outs in town that are advertising diesel as high as $3.99 today (but didn't see anyone pumping at that price).

[MFAFF]

Originally Posted by sammyg2

kid, take a good look at what a barrel of crude oil costs. Divide that by 42 (that's how many gallons there are in a barrel). That number represents what the raw materials cost. Add in things like labor, maintenance, about $11 million a month in utility bills for the average refinery, and you will now know what it costs to make a gallon of diesel fuel.
The refinery I work for processes around 4,010,000 gallons per day on average and has an operating cost of around $8 per barrel. If the finished product sell for $9 per barrel more than the crude oil cost, we make $1 per barrel or 2.3 cents per gallon.

The crude oil we are processing right now cost us around $100 a barrel (you have to order it and pay for it in advance). That means we paid $2.38 for a gallon of it.
It costs us about 19 cents per gallon to process it and turn it into a good clean fuel. That is very efficient BTW.

This means the diesel we are making right now, this very minute, cost us $2.57 to make. We are selling it for $2.12 for a grand total of ... drum roll ...... a 45 cent per gallon loss. howz that for gouging? .
The spot price in the LA harbor area right now for diesel is $2.12 a gallon wholesale. The difference between that price and the price you pay is called mark-up, and that is done by an independent distributor and retailer. Not an oil company.

It will settle down once crude stabilizes and we start getting deliveries of the cheaper crude, and once refineries stop over-producing diesel. Probably by spring.

If, if we were lucky enough to be be processing crude today that cost us $69 a barrel we'd be happy as hogs in shoot. We'd be making diesel that only cost us $1.83 a gallon to make and we'd be making 29 cents a gallon! Oh that would be nice, but it ain't reality. We can dream, can't we?
By the time the refineries start processing crude purchased at today's price, diesel will probably be selling for around $1.85 wholesale for a net profit of 2 cents.
maybe the big bad oil companies aren't so big or bad after all?

Very clever explanation, thanks..

But as often the case the information does reveal that the oil companies are sheding crocodile tears on this issue....

If, as you say, you are now refining oil that was purchased and paid for in advance at the higher price and so you are losing money.. then perhaps when the crude price goes up (at source rather than the local 'dockside price') and within a day or so, if not hours, the price of retail gas goes up accordingly the profit margins on these gallons of gas are vastly higher....as you say the gas being retailed was dervied from crude purchased and paid for at the lower cost.

Note the relationship between crude price and retail price(in the UK) is most closely linked at the stations that are operated 'by' the oil companies, as opposed to third party retailers.

If this were not the case then oil (not retail ) companies such as BP and Shell over here would not be able to announce the profit margins they have in the recent past.

Over here of course a higher retail price is 'encouraged' by the government for two reasons.. greater tax revenue (always welcome for them) and the perception that cars are the unique and sole and evil creators of the climate change that if it goes unchallenged will cause the human race to be wiped out next Tuesday a 1.03pm precisely...

[sammyg2]

Originally Posted by Jim Richards

Now, back to work, damnit!

Nope, I'm on vacation. I get 4 weeks a year and I've only been with this company for 2 1/2 years so I guess I shouldn't be complaining