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PD Moderator	Message Posted: Jan 14, 2011 3:09:16 PM Ignore PD Report Abuse I was recently asked: "What is up with the price of diesel? I saw $3.63 this week I don’t know of any change in season formula or CA only requirements that could be used as an excuse." "Here is a technical question. I understand that oil companies refine a barrel of oil into different products based on hydrocarbons with propane at the top, then gasoline, then diesel and kerosene then gear oil or grease near the bottom. Do the refiners have a choice as to how much of each product they can produce? Can they for example make more gas and less diesel from a barrel of oil?" Here's my answer: In terms of diesel prices, yes- they used to be cheaper than gasoline. As of the last few years (going back to... Visit GasBuddy Blog for full article

Moderator

Message Posted: Jan 14, 2011 3:09:16 PM

Ignore PD Report Abuse

I was recently asked:

"What is up with the price of diesel? I saw $3.63 this week I don’t know of any change in season formula or CA only requirements that could be used as an excuse."

"Here is a technical question. I understand that oil companies refine a barrel of oil into different products based on hydrocarbons with propane at the top, then gasoline, then diesel and kerosene then gear oil or grease near the bottom. Do the refiners have a choice as to how much of each product they can produce? Can they for example make more gas and less diesel from a barrel of oil?"

Here's my answer:

In terms of diesel prices, yes- they used to be cheaper than gasoline. As of the last few years (going back to...

Visit GasBuddy Blog for full article

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gasokie Champion Author Oklahoma Posts:3,448 Points:1,326,225 Joined:May 2007	Message Posted: Feb 10, 2011 6:44:26 PM Ignore gasokie Report Abuse While diesel may be a superior fuel to gasoline, containing more carbon atoms per molecule than reg. gasoline, switching trucks and cars over to CNG is the key to taking demand off refiners and lowering gas. Even if it fails to lower gasoline & diesel prices, CNG is much cheaper-cleaner (about 20 cents on the dollar adjusted for millage etc) than the other fuels. And we got lots of it.
MAGForce Rookie Author New Jersey Posts:2 Points:1,015 Joined:Feb 2011	Message Posted: Feb 9, 2011 4:51:27 PM Ignore MAGForce Report Abuse Excellent general answer, without overly complicating the process. Bottomline... diesel is the red headed step child, made up largely of commercial trucking, marine, and some idiosyncratic european auto owners, that want their car to last for at least 60 years, perhaps longer! The "low sulfur" crowd certainly added to the cost, but by and large it is simply a market decision based on profit margins versus volume! Smaller markets, lower volumes... higher prices!
bar1035 Champion Author Charlotte Posts:9,167 Points:1,299,195 Joined:Aug 2006	Message Posted: Feb 9, 2011 12:44:03 PM Ignore bar1035 Report Abuse just yesterday we were told gas stocks were at a 21 year high. so tweak for some more diesel you idiots
sabob Champion Author Pennsylvania Posts:12,510 Points:1,129,245 Joined:Dec 2008	Message Posted: Feb 9, 2011 9:59:02 AM Ignore sabob Report Abuse But we are told the demand for gasoline is down so that should make for more crude available to make diesel fuel which would bring the price down but it don't. If the demand for diesel was down then they would say that's the reason for the high price, that they have to make more profit per gallon!!!
albert2008 Champion Author Winnipeg Posts:7,357 Points:1,481,985 Joined:Sep 2008	Message Posted: Feb 9, 2011 9:12:48 AM Ignore albert2008 Report Abuse supply and demand same as #1 heating fuel with additives
PathfinderSC Champion Author South Carolina Posts:9,521 Points:1,831,615 Joined:Mar 2008	Message Posted: Feb 7, 2011 10:23:02 PM Ignore PathfinderSC Report Abuse There is no good reason for diesel to be this high.
theshredguy Champion Author Portland Posts:1,167 Points:230,075 Joined:Dec 2010	Message Posted: Jan 17, 2011 12:01:44 AM Ignore theshredguy Report Abuse Yup
torn8owx Champion Author Philadelphia Posts:2,313 Points:577,515 Joined:Feb 2010	Message Posted: Jan 16, 2011 2:04:30 PM Ignore torn8owx Report Abuse More sensitive to the global economy since diesel has many more uses
honda0105 Champion Author Tallahassee Posts:18,632 Points:1,610,495 Joined:Nov 2008	Message Posted: Jan 16, 2011 8:14:42 AM Ignore honda0105 Report Abuse the easiest way to solve many of the diesel issues (including higher prices for EVERYthing) is to grow our own biodiesel.
theshredguy Champion Author Portland Posts:1,167 Points:230,075 Joined:Dec 2010	Message Posted: Jan 15, 2011 9:16:35 PM Ignore theshredguy Report Abuse ... it is what it is. We have no control over the price of diesel OR gas.
Norm10 Champion Author British Columbia Posts:3,342 Points:162,925 Joined:Dec 2010	Message Posted: Jan 15, 2011 11:38:42 AM Ignore Norm10 Report Abuse This is economics 101 - now there are more diesel powered vehicles there is more demand for diesel and as a result the prices are going up.
tomok Champion Author Portland Posts:33,047 Points:2,346,485 Joined:Aug 2006	Message Posted: Jan 15, 2011 11:27:47 AM Ignore tomok Report Abuse Diesel now has the sulfur refined from it and that cost more money, so the price is higher. There were more sulfur mines around the country but those mines do not produce anymore, they can get that sulfur from oil refining.
honda0105 Champion Author Tallahassee Posts:18,632 Points:1,610,495 Joined:Nov 2008	Message Posted: Jan 15, 2011 7:37:57 AM Ignore honda0105 Report Abuse djtdi: you've got the part about paying w/out a peep right for the US. Look at France, Italy, etc. The truckers protest and they jam up roads for hours, sometimes days. To the extent that the entire economy shuts down. If prices rise to high too fast, they protest. Here in the US? Have you seen ANY truckers protest when diesel hit $5+ in 2008? We ALL should be concerned about high diesel prices b/c it comes down to everyone's pocket in the form of higher food, clothes and other commodities' prices. We ALL pay more if diesel (which is the fuel for transportation) is high.
Grismer Champion Author Kitchener-Waterloo Posts:8,539 Points:1,725,020 Joined:Apr 2008	Message Posted: Jan 15, 2011 4:53:32 AM Ignore Grismer Report Abuse As more people use lower priced diesel to cut fuel costs for personal vehicles, demand increases. Limited diesel supply translates to higher prices which then eliminates any fuel savings. Worse yet, costs for mass transport of products and people also escallates since these vehicles also require diesel.
Powerstroke73L Champion Author Sacramento Posts:2,816 Points:731,150 Joined:Jul 2008	Message Posted: Jan 15, 2011 3:51:02 AM Ignore Powerstroke73L Report Abuse This is 2 days in a row that I disagree with the “opinions” of Mr. Dehaan and think that he has no idea of what he speaketh of. An example - “diesel has seen more global demand- whether it has been for construction in China...” Huh? We don't buy our diesel from the middle east or anywhere else. Diesel is made out of crude in US refineries and how much they use in Europe or China has NOTHING to do with the amount that we have. If this writer knew what he was talking about and wanted to give a clear picture of things, he would have at least mentioned the fact there is currently more refined diesel in storage in the US than at any time except for 3 months (all this year) since 2004. Maybe he could have at least said, “Gee, I'm not sure why prices are so high because there sure is a lot of it out there in storage tanks in this country” but he's become a “Senior Petroleum Analyst” on this site (apparently based on the fact that he's been interviewed “hundreds of times”) so he can't make it look like he has no idea. Pretty lame.....
gass12 Champion Author Omaha Posts:8,394 Points:2,305,440 Joined:Oct 2005	Message Posted: Jan 15, 2011 3:43:56 AM Ignore gass12 Report Abuse That is the reason the diesel will never overtake the gas engines.
comprof Champion Author Houston Posts:6,864 Points:1,357,725 Joined:Jul 2009	Message Posted: Jan 15, 2011 3:35:56 AM Ignore comprof Report Abuse DellDude2: Good observation.
DellDude2 Champion Author Nashville Posts:9,415 Points:2,123,485 Joined:Aug 2005	Message Posted: Jan 15, 2011 3:23:31 AM Ignore DellDude2 Report Abuse Stories about new clean diesel cars with exciting MPG figures become a lot less exciting when you figure how much higher fuel costs are.
findcheap Champion Author Los Angeles Posts:9,602 Points:2,010,850 Joined:Apr 2007	Message Posted: Jan 15, 2011 3:16:02 AM Ignore findcheap Report Abuse fuel prices r all over the place, depending on the area & what they can get. Sometimes diesel is higher, sometimes lower.
Pozole Champion Author Portland Posts:9,603 Points:1,595,495 Joined:Mar 2005	Message Posted: Jan 15, 2011 3:12:20 AM Ignore Pozole Report Abuse ...hey, GB finally shows today that gas prices here are going up again, but the prices I report have been rising all along...
twobroke61 Champion Author Michigan Posts:8,385 Points:1,590,235 Joined:Sep 2008	Message Posted: Jan 15, 2011 3:07:04 AM Ignore twobroke61 Report Abuse truckers and heating is the reason for the increase now the price of groceries are on the rise because of it and yet they say no inflation this year BS
jcurley Champion Author California Posts:7,908 Points:1,776,220 Joined:Dec 2007	Message Posted: Jan 15, 2011 2:57:31 AM Ignore jcurley Report Abuse As we discussed the other day, there are a lot less refiners in the US than there was 30 years ago. Less competition means price manipulation is much easier. We allowed the large refiners to buy up the smaller and/or independent refiners. That's what happens when you have capitalism without rules.
star_deceiver Champion Author British Columbia Posts:3,377 Points:944,395 Joined:Jun 2008	Message Posted: Jan 15, 2011 2:45:06 AM Ignore star_deceiver Report Abuse Time to move somewhere else!
NavyStore Champion Author Seattle Posts:3,860 Points:2,077,120 Joined:Aug 2005	Message Posted: Jan 15, 2011 2:44:48 AM Ignore NavyStore Report Abuse Yes, but OTR truckers can haul upwards of 80k pounds. Then again, a VW Rabbit diesel gets 45 mpg highway, so, you choose.
Retowered Champion Author Colorado Posts:8,582 Points:2,686,390 Joined:May 2004	Message Posted: Jan 15, 2011 2:40:30 AM Ignore Retowered Report Abuse Is that why over the road trucks get about 5 miles to the gal.
grouch311 Champion Author Peoria Posts:6,378 Points:1,573,905 Joined:Jun 2007	Message Posted: Jan 15, 2011 2:37:57 AM Ignore grouch311 Report Abuse it's about a $0.30 difference here
Matt G Champion Author Boston Posts:4,538 Points:2,774,015 Joined:Jun 2004	Message Posted: Jan 15, 2011 2:34:28 AM Ignore Matt G Report Abuse And it will stay that wat now that more cars are becoming diesel powered
LostToo Champion Author Illinois Posts:4,392 Points:975,315 Joined:May 2009	Message Posted: Jan 15, 2011 2:31:05 AM Ignore LostToo Report Abuse yes
speedys Champion Author Utah Posts:7,022 Points:2,559,860 Joined:Nov 2005	Message Posted: Jan 15, 2011 2:29:08 AM Ignore speedys Report Abuse Here diesel is 50 to 60 Cents higher than gas.
rwm1 Champion Author Iowa Posts:2,306 Points:1,546,365 Joined:Oct 2007	Message Posted: Jan 15, 2011 2:24:29 AM Ignore rwm1 Report Abuse Yes, it does surprise me! There is no sense in it at all. Diesel is still the cheapest to refine. China and India can't have all of a sudden developed a thirst for it. One answer greedy and reckless speculators. 2008 all over again. Wait for the bomb to hit Wall Street and all crashing down but harder this time.
rwm1 Champion Author Iowa Posts:2,306 Points:1,546,365 Joined:Oct 2007	Message Posted: Jan 15, 2011 2:21:40 AM Ignore rwm1 Report Abuse We already are paying higher. Milk went up a dime here. Noticed a few other grocery items recently increased and far less sale prices. Diesel is so obscenely overpriced here at 3.49. And no sense for it. Harvest season is over here. Just the normal truck traffic. 2008 all over again. [Edited by: rwm1 at 1/15/2011 2:22:20 AM EST]
minnesotagirl Champion Author Milwaukee Posts:5,867 Points:1,232,645 Joined:Oct 2009	Message Posted: Jan 15, 2011 2:19:56 AM Ignore minnesotagirl Report Abuse And this surprises anyone?
fightbigoil71 Champion Author Milwaukee Posts:7,567 Points:1,546,630 Joined:Nov 2008	Message Posted: Jan 15, 2011 2:15:01 AM Ignore fightbigoil71 Report Abuse We'll pay more for shipping goods
nurdco Champion Author Colorado Springs Posts:9,238 Points:1,695,385 Joined:Apr 2008	Message Posted: Jan 15, 2011 2:06:31 AM Ignore nurdco Report Abuse Commercial GREED from trucking industry users not personal usage
joel27nc Champion Author Raleigh Posts:10,542 Points:1,859,345 Joined:Mar 2008	Message Posted: Jan 15, 2011 2:00:10 AM Ignore joel27nc Report Abuse yes it is
GAS1251 Champion Author Texas Posts:5,153 Points:1,627,205 Joined:Jun 2008	Message Posted: Jan 15, 2011 1:58:17 AM Ignore GAS1251 Report Abuse maybe we can hang the increased diesel cost on inreased demand
Saturn93 Champion Author Salt Lake City Posts:7,292 Points:1,640,885 Joined:Oct 2006	Message Posted: Jan 15, 2011 1:57:52 AM Ignore Saturn93 Report Abuse Diesel also gets better mileage and longer engine life. So there are a few trade offs.
pulpwood Champion Author Mississippi Posts:7,379 Points:1,859,605 Joined:Sep 2006	Message Posted: Jan 15, 2011 1:57:34 AM Ignore pulpwood Report Abuse Our War machine loves it, that is why the prices have been elavated!
9C1 Champion Author Chicago Posts:22,864 Points:4,247,560 Joined:Jul 2001	Message Posted: Jan 15, 2011 1:55:45 AM Ignore 9C1 Report Abuse Sure diesel is more expensive, so?
vulcan96 Champion Author Ohio Posts:26,926 Points:3,104,650 Joined:Aug 2004	Message Posted: Jan 15, 2011 1:47:50 AM Ignore vulcan96 Report Abuse diesel costs more because they have a monopoly on a needed item, people have to have it to survive(such as all the big rigs) , etc same as the unGodly price of gas. [Edited by: vulcan96 at 1/15/2011 1:48:24 AM EST]
OnTheWater Champion Author Orange County Posts:2,123 Points:623,130 Joined:Nov 2009	Message Posted: Jan 15, 2011 1:46:11 AM Ignore OnTheWater Report Abuse Glad I don't drive a diesel.
mvosevich Champion Author St. Louis Posts:5,489 Points:1,115,410 Joined:Aug 2004	Message Posted: Jan 15, 2011 1:41:46 AM Ignore mvosevich Report Abuse Big oil knows how to maximize profits.
wiwhite87 Champion Author Milwaukee Posts:2,551 Points:666,235 Joined:May 2009	Message Posted: Jan 15, 2011 1:41:06 AM Ignore wiwhite87 Report Abuse If the demand for diesel or related fuel products lessens, it will eventually run outside the ability for refiners to crack it and the price will drop.
Prodaddy Champion Author Houston Posts:8,380 Points:1,895,185 Joined:May 2007	Message Posted: Jan 15, 2011 1:41:01 AM Ignore Prodaddy Report Abuse I don't see diesel ever being cheaper than gas again
pjhbac Veteran Author Montana Posts:426 Points:44,350 Joined:Aug 2008	Message Posted: Jan 15, 2011 1:39:31 AM Ignore pjhbac Report Abuse jackson661 & others: do you mean diesel/electric hybrids? I'm unfamiliar with the diesel electric term you use. Thanks!
jackson661 Champion Author Columbus Posts:3,770 Points:1,477,830 Joined:May 2006	Message Posted: Jan 15, 2011 1:33:01 AM Ignore jackson661 Report Abuse Go figure cost less to make but charged at a higher price ...Clean diesel electric will get you even better mileage..
throttle Champion Author Maryland Posts:11,982 Points:2,464,695 Joined:Jul 2004	Message Posted: Jan 15, 2011 1:30:08 AM Ignore throttle Report Abuse Right on, REVLAW!
REVLAW Champion Author San Antonio Posts:10,440 Points:2,008,220 Joined:Jul 2007	Message Posted: Jan 15, 2011 1:25:32 AM Ignore REVLAW Report Abuse Folks need to stop trying to find logic or reasonableness in all of this. The answer is simply the policy of "whatever we can get away with".
CrackedLCD Champion Author Alabama Posts:9,036 Points:1,755,800 Joined:May 2008	Message Posted: Jan 15, 2011 1:23:41 AM Ignore CrackedLCD Report Abuse A guy driving a car from 1966 says "it's noisy and it smells." Pot, kettle. I bet the new Jetta TDI could hold its own with that old 'Stang if it was still stock. ;)
JoeKR Champion Author New Jersey Posts:9,478 Points:1,744,695 Joined:Feb 2006	Message Posted: Jan 15, 2011 1:22:51 AM Ignore JoeKR Report Abuse Brought to you by the same thieves who gave us unleaded gas for a higher price than leaded gas - where they had to put the lead in in the first place!