Why is diesel 60 to 70 cents higher than gas low octane gas. In 1996 when I bought my first diesel truck, diesel was 30 to 40 cents cheaper than gas. Suposedly it took less refining than gas. Now it has made a dollar a gallon swing in 10 to 12 years. I understand supply and demand, But to me that almost seems like price gouging. The government should reward us for using a more economical truck. However; these prices will force many back to the gas guzzling v-8's. Just curious on other peoples input.
Thanks

 

evidently the government is still subsidizing big oil. started to do a google search on the topic but i got distracted...

 

Why are diesel fuel prices higher than gasoline prices?
Until several years ago, the average price of diesel fuel was usually lower than the average price of gasoline. In some winters when the demand for distillate heating oil was high, the price of diesel fuel rose above the gasoline price. Since September 2004, the price of diesel fuel has been generally higher than the price of regular gasoline all year round for several reasons. Worldwide demand for diesel fuel and other distillate fuel oils has been increasing steadily, with strong demand in China, Europe, and the U.S., putting more pressure on the tight global refining capacity. In the U.S., the transition to low-sulfur diesel fuel has affected diesel fuel production and distribution costs. Also, the Federal excise tax on diesel fuel is 6 cents higher per gallon (24.4 cents per gallon) than the tax on gasoline.
http://www.eia.doe.gov/bookshelf/bro...sel/index.html

 

"Also, the Federal excise tax on diesel fuel is 6 cents higher per gallon (24.4 cents per gallon) than the tax on gasoline. "

Thats interesting. Then you have the Commonwealth of Virginia add another 16.5 cents in tax on top of that. Some other states probably have more.

 

Even with ULSD units, Diesel still goes thru less refining that gasoline. What it boils down to is that stove oil and jet fuel take a large portion of the processed crude that would otherwise be made into diesel. Oil companies raised the price of diesel above gasoline because of a rising demand on Jet and stove oil. Once they did that and the demand for diesel did not diminish, they decided to keep hiking prices to see what they could get. So far the demand still has not dropped. You also have to consider that fuel is a world commodity. Every time the Fed cuts interest rates, it devalues the American dollar. Every time that happens, the dollar buys less on the world market. This is another big factor in the price of fuel.

The way I see it, we only have 3 ways to bring prices down:
1. legislation
2. decrease demand
3. increase the value of the American dollar.

Slowing down processing costs them money. They want to run at high rates and sell as many gallons as possible. If we decrease demand, they will have to store more, which costs them money.

Somehow, I don't think Americans are going to decrease their demand for fuel.

 

At one point WA had the highest fuel tax in the US.

 

I just dont understand if there is a tight refining capacity why cant the oil companies take some of their record breaking profits and build some more refineries. I try not to complain about fuel prices too much because I am going to buy it no matter what but it is starting to get depressing when it is time to fill up.

 

Three little letters; E.P.A.

The environmental advocates won't let new refineries be built. They also put HUGE restrictions on expansion of current refineries.

 

Its even more depressing up here, we EXPORT 70% of our fuel to the US and still pay more for fuel. Right now we pay 4.49 a gallon (US). I put in $105.00 in the truck last night and I had 1/3 of a tank to start with...

 

SCREW the EPA. Those morons are so used to telling us what is good for us, that they can't see daylight for their on stench in the way. The EPA is a government agency that the BOSS of the govt should be able to change, that would be US. Why does Bush not make the EPA back off so that his BIG OIL Buddies can build a couple of updated refineries? Of course why would they want to spend millions of their profits when it would not benefit them? Many other sources of power are regulated, why is BIG OIL ? Our politicians are bought and paid for, no matter which side of the aisle they reside from.
It is time for the citizens of this country to take the country back. Big Oil should not be allowed to ship our natural resources overseas when they are needed here in the USA.To me, it does not matter what the oil market is around the world. The price gouging going on here in the USA should not be happening. When Capitalism becomes larger than a democracy, it is time for a change, and not one like Bama calls for either. If it takes a Socialistic approach to get the econmy under control, then so be it. OIL is single handedly destroying all of our ways of life and the President acts as if he doesn't even know how much fuel costs. He probably doesn't care as his actions have proved. We are going on strike here in Middle GA this weekend, and most of us are prepared to stop ALL big trucks at whatever costs. It is going to take drastic action to get this turned around. I hope many of you will organize in your various areas of the Country and stop the flow of trucks. Trucks deliver everything. When stores run out of food, and mills run out of raw materials, and fuel deliveries stop, then someone will take notice.

 

I read someplace that a few hundred million dollars was spent on a process to convert ULSD into gasoline. That says a lot.
anyhow, you might be surprised how much of the increase is related to inflation and not just the price of oil. If you spend a lot of money in debt without making more you are worth less to creditors. Same on a national scale.
If we were smart here, wed have invested in something like algae biodiesel and become the new 'saudi arabia of alternative fuels' instead of sitting on our previous accomplishments and allowing everyone to pass us in new tech.
eventually petroleum will run out. thats a fact. what we do to prepare ourselves is entirely up to us.
Once big oil dries up (if they dont change and adapt) theres going to be a big swing in power. could be a good time if we are more in control of our own energy for a change. more freedom for all.
I envision something like the appleseed reactor where you can download plans for building a setup to grow the stuff, press it and make fuel for yourself. Now THAT would be great.

Anything we can do to be self-sufficient increases our freedom because we are not dependent on government and corporations to provide for us.

 

As was said by lackskill they keep pushing up the price on jet fuel and diesel because we have kept buying (supply and demand) also i am sure the profit margin for #2 is a lot higher than it is on unleaded. The thing that really gets me HOT is the multiple times they profit from us everyday their are very few things that you buy that are NOT tyed directly to oil in some way (food,trucking,rail shipment, manufacturing,etc) and so most everything gets pushed on to us for every little increase.
Another big factor lately is the futures market which as i understand it is now full of speculators running the prices up and of course making big profits on our backs again!!!

I know that increased and better refinery capacity could be done if they really wanted to but why bother when you make a bigger profit every week

Exxon is still playing around in court over the valdez spill in alaska refusing to pay their fine of 2.7 million because they say their clean up bill was so high from the spill. That 2.7 would cost them a lousy 6-7 weeks profit today yet they continue to fool around after what about 15-20 years from the incident in court and i wonder who is footing the bill for the government side of the case

This ethenol kick is another one milk will soon be the magic $4 per gallon like fuel!! Corn is used in many things dairy products are just one of them and corn is one of the toughest crops on the land it also uses a large amount of fuel related inputs to produce. Do we need to look for alternate fuels yes is corn based ethenol a good one not from my research.

Rant off blood pressure/boost down

 

the total that exxon is required to pay, as a result of the valdez incident is nearly $5 billion in actual and punitive damages. amazingly, there was a big jump in prices at the pump, within a day of a recent court ruling, in which exxon was ordered to pay an additional $2 billion.

 

The oil companies are shooting themselves in the feet. Just as many that were living high off the hog in the early 80s almost went bust in the mid-80s.

What happened is that it took a few years for the Americans to send their 1970something land yachts off the the scrap yard and start to buy smaller, more efficient vehicles. Once that happened in the mid 80s, the oil companies ramped up production expecting demand to make them rich. Instead, we had an oil glut that dropped prices near my childhood home to as low as 60¢/gallon in the mid 80s!

The oil companies have learned their lesson in that they are not going to rapidly increase production to try and stem an increase in demand.

But they are in a delicate position. On the one hand, if they let the price drop too far, they will go broke like in the 80s. On the other, if they let it get too high, people will be flocking to alternative energy and they will again be broke.

The EPA is not solely to blame. The primary cause is the NIMBY factor. EPA permits and such are MUCH easier to obtain than is public approval. EVERYONE agrees we should have more refining capability, but NO ONE wants to be the one to have it near them. It's like building a prison! We all see the need for it, but we all want it built near THEIR house!

As much as it hurts to see gas so expensive and diesel even more, I'm still partially cheering the high prices everytime I see someone driving a Suburban and they are the ONLY one in it! Since when was a 5000# SUV the primary commuter vehicle in the US? What happened to carpooling? Small cars? Motorcycles?

The realization I must come to is that we in America are now so prosperous on average that we can pay the exorbitant prices and go on with our lives.

Until the price gets high enough to cause a REAL disturbance in people's lives, don't expect any halt to the rise in prices.

Never mind the laughably weak dollar brought on by foolhardly monetary policy.

 

You are correct on the total for everything thats what makes it so crazy the actual (fine for the spill only) not everything else is 2.7 mil from what i read and they are i am sure spending a lot more to fight it while also wasting all of our federal court money in the meantime which we all are paying for.
The bottom line is we foot the bill for the fight on both side while they continue to make record profits

I agree with what Hohn about the suv's for commuting i think part of what has raised and kept the diesel price up there is all the yuppys that have to have a dually 4x4 to run around town to try and look cool while getting a loaf of bread.
Oil companies see this and know they can run the price sky high and this group will keep on buying no problem same thing applies to large gassers