why is diesel so much more than gas now?

Anonymous-0

Well-known Member
It may sound like a stupid question,but not to get into cents per litre in Canada,but diesel is more than 30% more than gas here right now.Not too many years ago it was 15% less.What's the reason?pd
 
because everybody has diesel pickups, and them, machinery and big trucks all burn lots of it, the oil companies keep the price up on what they sell the most of, diesel is a byproduct of making gasoline, before rudolph diesel invented the diesel engine they used to throw it away
 
A lot of factors for tghe flip flop. I'm not convinced that there was any big surge in diesel pickups that made much difference.

I lay it more to the ULSD requirements, which extended to off-road equipment, as well. That had several effects. Two that com eimmediately to mind -- first is the cost of additional refining. Second is a loss of capacity due to the shutdowns necessary to switch back and forth between products at the refinery. This has been going on for years with gasoline, as they have to shut down periodically to convert between summer and winter blends. Instead of making just plain old #2 that only had to be dyed afterwards to indicate the use it was taxed for, they have to switch from time to time between #2 and ULSD, and all the time spent switching is time that they aren't producing, with the result that some supply is lost.
 
The sulfur content. May only took pennies to lower the sulfur content, but lots of pennies to store it and get it to termials and still keep the sulfur content where it should be. Its another product that has to be handled and each new product comes with more goverment regulations then the last one. We are from the goverment and here to help you (EPA).

Have a blessed Thanksgiving
 
Biggest reason is demand.

The biggest demand is from the European nations.

Our diesel now meets their specs so they want it cause it is cheaper than what they produce.

Gary
 
Greed? It's almost the same as heating oil, oil companies will say to produce ultra low sulfur fuel cost them more then it did a few years ago, I don't know, it sucks I don't know how truckers keep their rigs on the road. Half of all vehicles sold in Europe are diesel.
 
I stopped at KWIK-Fill to fill my gas tank. The diesel price was .25 cents more per gallon than gas. I looked at the sign a second , & third time. Last I paid attention , it was around $1.00 more per gallon.
 
I don't know what all the causes are. But, I've watched and read as it happened.

Ultra low sulphur was supposed to add 10 cents to every gallon, not a buck or more. The hydro-treatment to remove the sulfur also removes lube and BTU energy. So, after the process, lube additive has to be put in. End result - we pay extra for fuel with less heat energy.

I first saw road-diesel climb above regular gas during the Katrina thing in Louisiana. The government stated - at the time - that diesel fuel from all over the USA was being diverted to Louisiana to run water-pumps and the price spikes would be temporary. That's when they went up, but they never came back down.

Last heating oil I bought (high sulfur) was $2.49 per gallon, and at that time - diesel at the pump was $3.99.
 
Like jd,I'm not sure either. Middlemen that I know in the petroleum industry say that what they gather from the higherups is that they can give gasoline away if they have to. They have industry by the short hairs on diesel.
 
Road taxes more than gas and less product per barrel for starters and count the munber of semi's on the interstates millions of gallons on wheels.
 
Its not a stupid question,its the answers that are stupid.What I found was that there was a bunch of what looked like real weak reasons,like Europe uses more diesel or something.Heres what I think,they can raise the price however they want to.The reason is there is no regulation,not even anybody talking to oil companies about it,because they have enough money to pay off the politicians and whoever else is necessary for them to get away with it.With the crooks running the show big oil had to get in there too and steal all they could.Seems to me the politicians and crooks are trying to sneak around and have a North American Union,and they know once that happens nobody will have the money they do now,as a matter of fact the whole thing is going to come crashing down.Then when they have ruined the economy for working people,they will have a big bunch of money,and dont really care what happens then,since they are a world company now.Instead of raising the continent to our level,they want to bust us down to third world status.After all they sold us all kinds of stuff,got rich as Ali Babba and the 40 thieves,so now they want to bust us,and go steal from other rich people.I guess it gets to where its no fun stealing any more when the government and people just roll over and dont do anything about it.Dont even talk about it much.Just my opinion,could be wrong.
 
1) Because they can.

2) As IAGary points out below, we're our diesel now meets European standards. Diesel is more used in Europe in passenger cars due to long term high gas prices. So they ship us gasoline, return with diesel. Net result is more gasoline supply, less diesel in the U.S.
 
Well cost I don"t know but I wouldn"t trade my dodge pickup for anything. I mean it is an 8 thousand pound truck that get around 20 mpg. And the power is always there. Yes I NEED it. Maybe if the country was a little smarter and look at what is available in europe there are cars there that 60+ mpg. Look at the volkswagon tdi Around 60 mpg.....but they cant sell new ones here because of the stupid emissions crap. It seems to me if we WANTED to help the environment we would be using MORE diesels. They are way more efficient than gas!!!
 
You know,I hate to say this,but there is no possible way they had to divert even 10%,probably even 1% of the diesel fuel to Louisiana after Katrina.Ive seen those pumps and they are big,but they surely dont use as much as 3 or 4 airplanes worth of fuel.That they would have to divert some fuel,yes they would,but they do every time they have a hurricane.Besides that,theres lots of fuel in that area,they probably had some stored just for something like that.That sounds like a lie,but who knows?
 
Well I think, just my opinion the young cooperate animals on Wall streetor the hedgies drove the price up so high so they can walk away with their millions but now every other business is failing and nobody is spending money their other investments went to $hit so now the greedy bastards backed off so maybe poeple can spend money on other things lets hear your opinion.
 
Congress mandated refiners to lower sulphur content equal to european standards as of 2006 to meet the Congressionally mandated emission controls on 2007 model year vehicles sold in the USA -- low sulphur fuel will be required for offroad, locomotive and marine use in 2010. Refiners and the Congressional sponsers of this legislation estimated this process would add between 10 and 25 cents per gallon to the pump price. Since these laws were passed, due to various state and federal stonewalling on permits etc. the refiners have not been able to complete upgrades on roughly 35% of the available refining capacity. Yes, they are exporting diesel fuel -- the high sulphur blend, but most all of them are also having to purchase low sulphur fuel from european suppliers to meet demand in this country. High demand lower supply = price increase.The refiners have so far spent an estimated 8 billon dollars on upgrades to US refinerys and I would imagine that a large portion of that work went to your Union brothers. On a similar topic, why on earth would you want Oil and refiners regulated any more than they are now. Oil is a commodity that refiners value enhance in many different ways employing tens of thousands across the US. One of the few really large scale industrial enterprises still in operation on US soil. Put price controls on oil and we will all soon be walking in the dark.
 
I can't believe some of the stuff I read here.
Comments about greedy oil companies. Oil companies are just like farmers - they're not in it for charity. If they don't turn a profit, they're out of business. Shareholders (which includes probably everyone of you that have a pension or retirement account) demand performance. Just like the banker who loaned you money for that new tractor or to buy seed demands repayment.
Conspiricy lovers say that price of diesel is being held high so oil companies can make money. If they control the market, why did they let gasoline prices drop? For that matter, if President Bush can control gasoline prices, why didn't he let them drop sooner so that the nnalert party could have had some help before the election?
Here are some facts and issues for your consideration:
1) The big public oil companies control a very small part of the world's oil. The vast majority is controlled by governments: Saudi Arabia and most of their middle east neighbors, Venezuela, Russia (indirectly, but firmly), Nigeria, Mexico, etc.
2) Most of us can remember when diesel only cost a fraction of gasoline. Back then, refineries got less gasoline from a barrel of oil than they can today. Catalytic cracker technology has increased the gasoline yield substantially. So now, a barrel of oil yields more gasoline than it used to. The excess diesel of yesterday is now converted to gasoline, so there's less diesel available.
3) US Clean air standards discourages diesel cars, along with Detroit's poor track record. I have owned diesel cars and also travel to Europe regularly. I don't know what the numbers are, but I would guess that at least 25% of the cars and small trucks in Europe are diesel.
4) Back when diesel prices were low, trucking was also heavily regulated. With trucking deregulation, the number of rigs on the road (all using diesel) skyrocketed. I understand that railroads can transport a ton of goods 140 miles for a gallon of diesel. I have no idea what the equivalent is for trucking, but it has to be considerably less. It doesn't make sense to have so many trucks on the road, but truckers, the people who make trucks, the people who construct highways, etc. are all voters, so don't expect any changes.
5) US sulphur content standards are strict. At the same time, more and more of the world's oil supply has high sulphur content (sour crude) - most of the light sweet (i.e. low sulphur) crudes have already been produced. Heavy crude refers to the specific gravity. Heavy crudes typically have more asphalt and wax, components that are difficult to refine to diesel or gasoline. It takes a lot of money to convert a typical oil refinery to one that can handle heavy sour crude. Many US refineries have limited capacity to handle heavy sour crude, and our environmental laws discourage the upgrading.
6) Our economic system here in the US is capitalism. It is what has made this the most successful and desirable country in the world, even though it is not perfect. The politicians and media have made greed a dirty word, but greed is what drives capitalism. The real problem is that we've let the quest for efficient capitalism drive business practices to the point that we will accept short term gains that we know will lead to long term problems (i.e. the lending / banking crisis). Everybody knew that encouraging unqualified people to take on loans they couldn't afford was a disaster in the making, but everybody thought that if they could just get their share before the pyramid collapsed, it wouldn't hurt.
 
I don't like the price of diesel costing more than gas either. But there is more demand for diesel relative to gas. Secondly, in the refining processes you can only get "x" amount of diesel and "y" amount of gasoline. I understand it but don't like it. One can talk about greed being the problem but I believe human nature will always try one to make the most money he can. There are many other products out there that are just as bad price wise as diesel. i.e concrete, metal siding, potash, tractor tires. In time these will all come down if the economy continues to falter. In the end there seems to be two choices: high prices and good economy or low prices and bad economy.
Which one do you want?
etc.
 
The regulation you would want would be on speculaters.At least for now.I see another reason why,if gas is selling for pennies a gallon everywhere else in the world except North America,Europe,and Australia,why would I think maybe some regulation somewhere was needed?Since you made a good bit of sense with your answer,its a little clearer to me,we need to stop the EPA from making these regulations about ULSD,and that could help.Actually I see where people with the big ships would want EPA to regulate diesel like this so they could have more business.If Europe already has ULSD diesel and its lower than or the same price as gas,somebody is lying,or shipping companies are raking in a big profit,or something,but setting around and letting them do whatever they want,is what is causing this.Just my opinion.What really is going on here is,we being a people that want to do things right,let oil companies do what they want pretty much.Other countries regulate all of their natural resources,and we could too.When we do it will be because these fools took advantage of us one too many times,and we took it back away from them.I actually think that its corruption,from outside the United States causing this.Ever since the last"merger"and we ended up with half as many oil companies that we had,the price of oil has went through the roof.Another form of regulation could be bust them up to where there is more competition.
 
actually yeah,have a farm dump truck with a cat in it and farm tractors,we get the diesel cheaper than at the pumps for farm use in the tractors,but not the truck.pd.
 
Calm down Dan these are just opinions.Not to pry you seem to have a lot of knowledge about oil where does this come from?................. Happy Thanksgiving !
 
Because of our great do-gooders and so forth we are importing a great amoun due to the supply. Too many pickups and so forth and wont change until Marathon and SHELL get their new additions on line in a couple yrs. The spokesman for Marathon says EPA keeps coming up with new bull about their addition and makes finishing and getting on line later and later.This makes the demand for the soy stuff greater also.
 
DAN,

You rock...you nailed it! That"s the largest use of fact I"ve ever seen on this OT/Tractor talk site...congrats! Tune into this guy he"s right, our markets are supply and demand folks and it"s good to be a capitalist.

Doug
 
i wouldnt trade my dodge diesel either, its simply the best value for the money spent, i own and drive big trucks for a living so the fuel the dodge burns is a non issue compared to the big trucks, but the demand for diesel when all the different uses for diesel engines is compared to the uses for gas we burn far more diesel so thats where the oil companies money and profit is made,and they know for big trucks there is no option, they must use diesel engines, years ago makers like hall scott made very large gas engines for trucks, but they were hauling less than half the weight trucks do now, and even then the big hall scotts, while a very well made engine were ineffecient they got about 2 miles per gallon, if such engines were being worked in big trucks and big machinery, boats ect today, the price thing would be reversed, i dont mind companies making a profit, thats what there in business for, but making record profits sinct this whole thing started leaves little doubt as to price gouging
 
Since I know a little about trucks I will try and answer some of that.For every hopper bottom railroad car you see holds about the same as 4 trucks.So say you had 100 hoppers of corn on a train,would be about the same as 400 trucks hauling corn.I dont know how much fuel a train uses,but a truck uses about 100 gallons a day and can go 700 miles,in 10 hours.I doubt a train can go much more than 60 MPH,and in mountains lots slower than a truck,of course fast down the other side.Anyway say on flat ground a train can do real good and run 700 miles in 10 hours.All thats needed now is how many gallons of fuel it takes to move a train 700 miles on flat ground.My guess is 1/2 the fuel it takes 400 trucks.If I can go 700 miles on 100 gallons of fuel in a truck,moving say 50,000lbs,700 miles a day,or 1400 miles with a team in 24 hours(and 200 gallons of fuel),I think the train is going to be quite a ways back there.Say the train does 1000 miles in 24 hours,somehow I doubt that even.So just a real rough guess,Im thinking it takes somewhere between half the fuel to run the train,maybe less than that.One of the new locomotives holds 5500 gallons of fuel,say you have 4 0n the train that would be 22000 gallons,the 400 trucks use 40000 gallons per 700 miles,dont know how far the train can go on 22000 gallons of fuel though.Trains cannot go everywhere a truck can,so there always will be a percentage of travel a load must be on a truck,some things would rot before a train got them there,so that has to be considered.Trucks have their place,trains have theirs.Sure more could be put on trains,but it would overload the system they have and be even less efficient.Trains take a good while to load and unload,costing quite a bit in labor most of the time.Then if you were able to put everything on trains,you would put 8 million truck drivers out of work,and there would be truck stops,tire dealers,just a lot more people out of work as well.That would be devastating to the economy worse than the automakers.
 
Ironically, the reason for the mergers between the major oil companies was so that they could compete with the various international oil monopolies. Exxon, pre merger, was one of the worlds largest publically traded corporations and yet post merger Exxon Mobile is dwarfed by Saudi Aramco. Saudi Arabia has roughly 1/2 of the worlds ''proven'' reserves and their lift or production costs are literally peanuts, no one else can compete heads up. If Saudi Aramco were a publically traded company Wal-Marts balance sheet would look like the local flea market in comparison. Venuzuela, Brazil, Iran, India, China -- just a few more of the big time players who do not let free enterprise or envioromental standards hinder their search for oil. In other words, the international stage is far from a level playing field considering the operational restraints US and other western corporations operate under. Oil is just to important strategically as well as to our economy to further impede US exploration and development. It is mind boggling that the US petroleum industry has to beg and lobby congress, UNSUCCESSFULLY, to EXPAND their domestic operations and provide good paying jobs while increasing production and lowering total energy costs in the process. As far as countries regulating their natural resources, I guess a few, such as Norway, actually put the money in the public purse. Of course this is socialism, but Norway is a small country that tightly controls its immigration and borders so the toppling of the ponzi pyramid will probably take alot longer. The leaders and ruling party of most countries with nationalized oil just steal the money and use it to suppress any dissent, they throw a few bones to the masses, like 30 cents a gallon gas but very few people can buy anything to burn it in.
 
Wait till 2009. All diesel vehicle exhaust must be fitted with srubbers.They are going to follow the European guidelines,with the European exhaust scruppers.Get your check boooks ready. All the Cummins,Cats, Duramax,etc. are going to cost more. Also the systems must be checked like another part of your fluids systems. There are some good additives,but in the USA we don't use them or even check them out. The new exhaust systems will be added to all diesel powered vehicles and you can take it or leave it. You won't have a choice because it has already been deemed as the way to reduce emmissions.

(fuelsandlubestechnologies.org)
 
Winter pushes demand up for diesel/home heating fuel and gasoline usage down.Sulphur removal is expensive. Shipping , storage and marketing of similar but different home heating oil, winter diesel, summer diesel, off road diesel, regular, low and ultra low sulphur products adds to cost. Used to be all one or two products.
The US armed forces are using a lot of JP8 which is a light diesel/kerosene type product.
 
Thats interesting.I think we would be better off with more oil companies than less,just like we were.Now when you check and see who owns these oil companies we have now,its most likely England.Since it probably only is one oil company thats just calling itself different names from different areas,they probably are behind the EPA calling for different fuels,because the new fuel doesnt get as good a mileage and they can sell more of it,at a higher price too.

Also the United States is number 3 in the worlds known oil deposits,behind Saudi Arabia,Russia.Maybe somebody else is in there.

You might be right,but every time there is a "merger"things get worse for us Americans.Oil company owners once before had to be broken up.Every business,to maximize profits,has to turn into a monopoly they think.In reality they work better if they compete.The way the American oil industry is acting,is like its a monopoly.Cutting production,then raising prices so it makes the same money on less oil.So thats what makes me think they are all owned by the same crooks.If they arent,they are working together as if they are one company.When they get abusive,like the oil company and EPA,they need to be fixed.To fix them they need to be smaller competing companies.The EPA could probably be torn down since its corrupt.
 
Dan in North Houston has it completely correct. Modern Cat crackers can sqeeze the last drop of gasolione out of a barrel of crude, leaving less for diesel, jet fuel and asphalt. Governments do own most of the crude, and that includes the US Government. As for diesel cars in the US, I think it is more a matter of consumer preference than emission standarts. VW still occasionally sells diesel cars in California, and our emission standards are as about as strict as they get.
 
You "can" crack 72 chain bunker C/#6 fuel oil into 94 octane gasoline if one wanted to.
The amount of gasoline from a barrel of bunker C would be make it an $$$ low efficiency project.
The resulting product from a "barrel" of oil varies dramatically with the crude product.
North Sea heavy crude is priced less than sweet middle east crude for a reason.
 
The ultra low sulfer standards are part of it. But the main reason I've hear is diesel being the fuel of choice for what we called third world countries. As they become more industrialized they will be competing for a larger share of all petrolium products.
 
Cash diesel 2.49 and 1.63 gas on I 80 near Morris, IL. Current price down from two days ago.
 
Here's an idea. BIG OIL drops the price of gasoline to kill the ETHONAL market. Once the ethonal market is "shot to he.." and most are gone the price of gas will increase again. How far fetched would that be???
 
Generally accepted industry averages:

Barge: 576 ton-miles/gallon

Trains: 436 ton-miles/gallon

Trucks: 150 ton-miles/gallon

ton-mile = 1 ton, moved 1 mile

Obviously there are trade offs -- barges have the most limited routes. It sure wouldn't be efficient shipping something by barge from St. Louis to New York via the Atlantic...unless it physically was too huge to move by train or truck.

There will continue to be a major role for trucks in both local delivery as well as "express" long haul.

That doesn't mean there isn't a role for the state & federal government to work with the railroads to expand and improve their networks to bypass congestion and improve the speed of loading and unloading trains. Railroads also do not need to depend on diesel and thus foreign oil -- they can be electrified and powered by your choice of domestic energy (coal, nuclear, or wind). The improved efficiency would benefit the general economy.

Likewise maintaining top notch Interstates, expanding congested highways, and filling in gaps in the grid will also benefit our general economy.
 
I agree that EPA standards; exporting diesel to other countries; and a few other factors may have the wholesale price of diesel higher by some but it not the whole story.

Look at these price charts and tell me if you see anything strange. Notice the rate of change for Wholesale (in black) gas and diesel. Now notice that the retail (in red) price of gas falls at about the same rate but the retail price of diesel does not.
If you were to look at a oil price chart it would look simular to the wholesale price change.
So now what is the reason for higher diesel prices??????
I will stand by my answer to a simular question last week and say supply and demand or the lack of easy access to diesel keeps the price up.

30 Day Gasoline Trend
30gastrend.gif


30 Day Diesel Trend
30dieseltrend.gif
 
The major stumbling block against using trains is the high (THINK TEAMSTERS UNION) cost of loading and unloading them. Other than that, they have trucks beat all to heck! Diesel prices are just like gas prices-Demand driven.
 
Its not the American public that wants it that way.Its the Wal Mart mentality that they have a warehouse full of goods in trucks on the highway.Thats "just in time" service.Truck companies provide this by even using other companies trucks if they cant cover all the loads with their trucks.Problem is with bad times like these,even shipping goods slows down to where there are less loads for everybody to haul.Thats when you haul a load somewhere and set for 2 days waiting to reload,then end up deadheading 400 miles to get another load.

Now look for that to get worse when trucking companies wont haul that just in time load to that destination because they cant reload the truck out.That will be when you go to Wal Mart and the shelf where the lampshade you want is not there for 3 months while they try and figure how to get a truck through there.

Another thing is look for that just in time stuff to stop when trucking companies cant afford to buy fuel because some company wont pay a fuel surcharge and trucks wont bring it.

I guess what Im getting to is,you can complain about trucks,but once you dont have any to haul stuff,you are going to wait a long time to get some stuff on shelves.Once it gets to where trucks cant haul it,and trains have to haul it,the price will go up so high you cant afford it anyway.Before trains bring everything as they one time did,you will have to ride on them to get anywhere.Then when passenger trains are competing for freight tracks,the price of moving stuff will be so high only rich people can ship stuff.By then,the businesses that would have gone under,the country wouldnt be recognizable any more.

The more I think about all this,the more it makes sense that we should bust these oil companys up so they compete instead of abuse us.The whole country is really kind of fragile,especially where energy is concerned.When we have people controlling this energy who live in another country,they dont see,and dont care what it does to us when they keep prices artificially high.Or they may even live here,but are too dumb to know what they are doing to the rest of us or dont care.We need to somehow remove that option from them.If they have enough power to do this stuff,thats too much power for an energy company to have all by themselves.
 
Well,a diesel actually runs better on propane or natural gas.They run so good on propane/natural gas they will run away with themselves and explode.I have been driving down the road before and the diesel got a whiff of propane or something and really pull too good for a few seconds,like next to a fire or a refinery or somewhere it was floating in the air,like maybe a backhoe busted a gas line.
 
buckanddeere, I am not sure if you are agreeing with me or not. The cat cracker cracks those long chain hydrocarbons in the residuals, such as bunker C fuel, into lighter products. If they will or not is a economic decision made by some product planner at the refinery. You are correct, crude from different sources is different, as are refineries and their capabilities, and their markets. No one wants to be in the bunker C fuel or asphalt business when they can sell gas, diesel and petroleum coke.
 

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