Diesel so much higher than gas?!

[mavrick1]

Anyone have any idea why diesel is running anywhere from 30-60 cents higher than gas right now? I live in the Tulsa, OK area and diesel is about 55 cents higher than gas. I looked at several states on www.flyingj.com and the pattern is pretty much the same nationwide. I love my truck but the drastically higher diesel price right now is killing me!! I know diesel is cheaper to make than gas so what the heck is going on?! :{

 

[Rman]

Diesel is not cheaper to make, all fuel comes out in the same stack, just different boiling points divide the different fuels through the bubblers. The demand of each fuel is what drives the price. Diesel is also classed with heating fuel, diesel is also an industrial fuel (large trucks, generators, tractors... etc) when industrial nations sprout up the deman sprouts with them. This is the case with China right now... All the cheapskates that buy that crap at Walmart have since fueled the Chinese economy. Americas tremendous consumer demand, coupled with tremendous demand for lower prices has forced production out of the US to keep prices down. This in turn jumpstarts economies in Asia which in turn generates more dmeand for fuel. When supplies of this fuel do not reach the demand the price will rise to accomodate.



It's unfortunate, but there is no real way to change this, ultimately we're at the whim of the energy companies. They make record profits and the only real answer for Joe Consumer is to not buy it to drive the price down. It's an ugly business, but that's free market enterprise.



I've just become comfortable paying 100 bucks a tank of fuel (I never thought I'd see the day).

 

[Jeff H]

Sounds about right.

 

[2Gen3Gen]

Diesel at Chevron in Grants Pass Oregon is still at $3. 19 a gallon

 

[rlyons]

Sounds about right except for one thing, the free enterprise system ceases to be a true free enterprise system when all the different fuel stations decide to price there fuel exactly the same and change prices at the same moment as they have been doing here for years. That becomes price fixing instead of free enterprise with competition. The old days of competing for your business is gone and the days of fixing prices are here. They know we have to have the fuel and we will pay whatever price they gouge us at. Diesel does require less refining and less additives than gasoline and is cheaper to produce, but the truckers have to buy it and people have to heat with it so they can jack the price up to whatever level they want.

 

[Rman]

Having been involved with running a gas station I can tell you that is not how it works... but believe what you wish. Just remember don't blame the gas stations on this, they aren't the ones raking in the dough (unless you're paying 5 bucks for a gallon of milk). Their suppliers set the price, they call their suppliers daily, and sometimes 5 times a day depending on market conditions.



Fuel is a global commodity, China is willing to pay for it if you're not then don't buy it someone else will. Until that someone else won't buy it the price will stay where it is. It's hard for people to understand I know, but that's life I guess. People want their cheap fuel, I think those days are over.

 

[RGardner]

I have to believe that there is more profit in diesel at these prices than in gasoline. If so then why is not more refining capacity being used to make diesel? Is it because of the damage from the hurricanes or is it just the usual seasonal gouging for home heating oil? The one thing I can tell you for sure is that if diesel does not come down the agricultural economy will be in ruins! Be prepared to pay much more for your food!

 

[Alphacowboy]

If so then why is not more refining capacity being used to make diesel?

Because due to enviromental laws and groups like NIMBY (not in my back yard), have kept any new oil refineries from being built in the USA since the 70's!

 

[RGardner]

So are refineries so specific that they cannot make both gasoline and diesel? That I find difficult to believe. Could it be that to make the general public happy we are cutting the price of gasoline but keeping the profit base in diesel? After all the businesses can pass that cost increase along to the consumer! So no one is hurt! Lets get real here and realize that we are being gouged. Privately the oil company execs are admitting that these profits are obscene!

 

[CSnyder]

The relationship between weekly gasoline and diesel fuel prices has shown a clear seasonal pattern since at least March 1994, when EIA began collection of weekly diesel prices. Typically, average retail gasoline prices move above average retail diesel fuel prices from roughly April through September. Similarly, diesel fuel prices usually move above gasoline prices during the heating season months of October through March. Heating oil and diesel fuel are closely related products, with the main difference being that diesel fuel has lower sulfur content than heating oil. As a result, diesel and heating oil are produced together, and seasonal increases in heating oil demand can put pressure on the diesel fuel market as well. This pattern abruptly ended with the 2004-05 winter, however. Not only has the diesel premium matched or lasted longer than at any time since EIA began collecting weekly retail diesel prices, but the gap between diesel and gasoline prices has been wider this winter and spring than in previous years.



Generally, the summertime is dominated by gasoline demand here in the United States but, this year, surging global distillate demand in Europe and Asia has retail diesel selling at a premium over retail gasoline. Historically, U. S. finished gasoline demand is more than twice U. S. total distillate demand, but consumption of distillates is strengthening at a quickening pace. In fact, U. S. distillate demand has grown faster this year than gasoline demand, with distillate demand growth from last year averaging more than twice that of gasoline. Distillate demand is also strong in Europe, where a significant fraction of the new vehicle fleet is diesel-powered, and in China, where demand for distillates is twice that for gasoline, and where overall demand has been growing rapidly. The global balance for distillate fuel has tightened seemingly much more so than that of gasoline.



With diesel selling at a premium to gasoline, refiners have been adjusting their product mix to take advantage of prices. In fact, distillate production has been at historically high levels as refiners try to capitalize on the price differential between the middle distillates and gasoline. However, strong global demand for non-highway distillates seemingly has limited U. S. heating oil restocking somewhat to date. Jet fuel is also playing an important role in the tight distillate market. As demand for air travel increases along with ground transportation, the problem becomes simultaneously satisfying demand for all light products. Jet fuel production cuts into distillate production rather than gasoline production because of the refinery distillation processes. So without increased crude inputs available, increasing jet fuel production reduces production of heating oil and diesel fuel. With the heavy worldwide focus on transportation fuel production, market concern is intensifying that refiners will have inadequate time to replenish heating oil inventories ahead of the winter heating season.

 

[rlyons]

Just glad it doesn't get cold here. The truck will stay in the garage an the motorcycle will stay out until the latest gouge shifts again.

 

[NVR FNSH]

All the cheapskates that buy that crap at Walmart have since fueled the Chinese economy.

Anything I buy at Walmart I can buy somewhere else for a higher price. Walmart most definitely does not have the market cornered on selling "Made in China" items.



Brian

 

[Jeff H]

Gas I must say has really dropped this week.

From $ 2. 70 to $ 2. 35

Although diesel went up from $ 3. 19 to $ 3. 23

 

[DBogo]

reg here is 2. 83 and diesel is 3. 29

 

[Rman]

Anything I buy at Walmart I can buy somewhere else for a higher price. Walmart most definitely does not have the market cornered on selling "Made in China" items.



Brian

I could go toe to toe for days on this one ... . but I'll leave it alone, somethings are a lost cause.



Gas has dropped here too, Diesel sure hasn't

 

[Rman]

I have to believe that there is more profit in diesel at these prices than in gasoline. If so then why is not more refining capacity being used to make diesel? Is it because of the damage from the hurricanes or is it just the usual seasonal gouging for home heating oil? The one thing I can tell you for sure is that if diesel does not come down the agricultural economy will be in ruins! Be prepared to pay much more for your food!

There really isn't at least on the retail side, supply side obviously has to be rolling in money, but delivery stations are lucky to make a nickel to a dime a gallon. Costco among others actually sells fuel at a loss to attract customers.



You hit the nail on the head with the refining, I've been asking that forever, the answe ris far from simple. Like stated earlier the NIMBY stance is common and the EPA has such harsh regulations and penalties it's difficult at best to get approved. Several factories pay HUGE fines to pollute, because it's cheaper to pay the fines then to try and meet the standards. When those fines get larger stuff will really hit the fan.



There is no simple answer to the problem, it's a global issue and will take sevreal countries to solve it. IF we can just rid ourselves of petroleum we'd be set. Unfortunately we are far more then just dependent on it, it is an absolute necessity.

 

[Jim Smith]

I think that I will start to buy from a local market for food to help the local guy rather than Wallie World. This might get the attention of the Wal-Mart folks if we all did this as well. I know it will cost me a few bucks more but sometimes I have to do what I think is right.

 

[Rman]

I think that I will start to buy from a local market for food to help the local guy rather than Wallie World. This might get the attention of the Wal-Mart folks if we all did this as well. I know it will cost me a few bucks more but sometimes I have to do what I think is right.

I shop around still, and hit specials at several locations. But Walmart or Sam's wil never be one of them. It's not as much the China thing to me as it is business ethics.



It's good to shop locally, your tax dollars go towards you're own community services (which I gladly will pay to use)

 

[JStraw]

O. K. , the whole world is buying crude oil from the same place, mainly saudi arabia. The market price is the same for everyone per barrel regardless of the quantity bought.



Now, since diesel comes from a less technical process of making (bubbling), and our country hasn't had a massive economic upswing, it doesn't make sense to me that diesel should be more.



It also doesn't follow that with the continued decline in gasser fuel, which cost more to make, that we aren't seeing an equal decline in diesel fuel.



Instead ,I've seen it (diesel) raise twice in the past two weeks as regular, silver ,and premium declined by about 20 cents.

 

[RamThatStroker]

Gas just dropped here to $2. 529 and is diesel is up from last week 10cents to $3. 199. Maybe I should buy a gasser might be cheaper to run