gas vs. diesel prices

[nalcon]

Kerosine is one of the first products distilled from crude oil. In the old days (prior to Ultra Low Sulfur diesel) #2 fuel was pretty simple and inexpensive to make. Jet fuel still is. However, today's diesel is refined more and cost more to make. How do I know? I make it.

[BCooke]

Found some interesting information.
Diesel prices explained
Agreed it is down under but I would not think they are that far off; In terms of production costs, in Australia, Automotive Diesel Fuel requires as much refining as petrol and their respective costs are equivalent.

[PalmSprings]

Ever notice how much one spends for hobbies,vacations ,motorhomes,repairs,depreciation, but is so emotional with the price increases i fuel?
Ya notice when it increases,but dont when it drops.. All cyclical,however it has ramped up,but really the cost is a near non issue comparitvely speaking.

[PalmSprings]

lets pretend you own your RV free and clear with no other expenses ever!
Now for the bummer..
Put your ENTIRE annual expenses into each gallon of gas.
'Do you think people would complain more and drive less than they do now,even though the cost really was the same?
Difference is that the whole amount you pay annually is in your face everytime you fill up.
I think there would be a revolt and fewer RVers.

EG total expenses incl depreciation $10,000
total miles for yr 5000
mpg 8
gal cost $4
$16 dollars per gallon would be a good estimate of its cost to this particular individuaal

Talking aBOUT THE REAL COST OF fuel,how about this?
I saw a figure once that considering the total cost of fuels.
That is including our military costs enforcing our access to fuels and all other expenditures related directly or not to maintaining fuel for the US in total. that may include all health effects,environmental effects and so on.

heres one study w/ results from 1998 when gas was 1.19 and 10-12 per barrel
Low estimate: $5.60/gallon
High estimate: $15.14/gallon
W/price spike: $15.37/gallon
Suire like to know what it is now added to our own particular annual expense

[Ray,IN]

Originally Posted by RustyJC

When federal and state road taxes (tax/gallon of fuel) are considered, diesel is usually taxed at a significantly higher rate than gasoline. Part of the reason for this is political populism (more voters use gasoline than diesel), and part of it is because diesel fuel is generally used by larger, heavier vehicles that the governing bodies consider to cause more road damage. This, of course, ignores the reality that these larger vehicles get fewer miles/gallon, thus would pay more per mile traveled if the tax rate were the same for gasoline and diesel, but that's the way it is.

Another reason is that, unlike Europe, our government discourages the use of diesel technology not only through higher taxation but also with emissions standards that target the weak spots of diesel engines - NOx and particulate emissions. On the other hand, Europe promotes diesel vehicles as the EU member countries tax diesel at a lower rate than gasoline and have emissions standards that target greenhouse gases (CO2, primarily) where the diesel has an advantage over gasoline engines. Thus, and because they get better fuel economy, we see a much higher percentage of diesel passenger cars on the road in Europe than the U.S.

Rusty

That is the most accurate explanation possible. To reinforce what Rusty said about refining costs; read this Oil Refinery

Remember that small Ford Focus? It is made with a diesel engine in Europe but the EPA will not allow it to be sold in the U.S. because it does not meet U.S. EPA requirements, even though it does meet European clean air standards. Ford refused to make the necessary modifications to the engine because it would add too much to the cost of a new Ford Focus.

[MaverickBBD]

The favorite refinery manager I ever worked for used to say that whenever anyone would ask him about prices he would reply: "He learned a long time ago that oil companies are going to get the most for their products that they possibly can". If people would begin to question him, he would reply: should the farmer or shop keeper do any less? So you should take less then what you think your labor is worth? To do so would be to deny capitalism doesn't or shouldn't work and I don't think they will let us go there on this forum.

[wnytaxman]

Originally Posted by MaverickBBD

The favorite refinery manager I ever worked for used to say that whenever anyone would ask him about prices he would reply: "He learned a long time ago that oil companies are going to get the most for their products that they possibly can". If people would begin to question him, he would reply: should the farmer or shop keeper do any less? So you should take less then what you think your labor is worth? To do so would be to deny capitalism doesn't or shouldn't work and I don't think they will let us go there on this forum.

The other side of that coin is competition. In theory the competition keeps the price in check, at least to some extent. Here in our area I can pay as little as $3.62 a gallon or as much as $3.79 and that's within a five mile radius. I have Gas Buddy on my phone and it's pretty accurate when I'm looking for fuel.

[SRT]

Originally Posted by wnytaxman

The other side of that coin is competition. In theory the competition keeps the price in check, at least to some extent. Here in our area I can pay as little as $3.62 a gallon or as much as $3.79 and that's within a five mile radius. I have Gas Buddy on my phone and it's pretty accurate when I'm looking for fuel.

That's funny, NOT. Around town here gas prices are identical except for Sam's Club and several independent stations. 25 miles away prices are 3-5¢ a gallon cheaper. No competition here.

[skipwil]

What bugs me is the fact that on Sunday at 1:30pm the fuel stop advertized $3.17 /gal - at 6:30pm the same stop was $3.36-at 7:15am Mon. the same fuel was $3.29/gal. I really can't understand that much difference. Now it's $3.24. Go figure. The barrel price goes down= price stays the same; but if the barrel price increases the the costs immeditely jump up. You pay or stay at home.
Safe travels..

[BCooke]

Originally Posted by wnytaxman

The other side of that coin is competition. In theory the competition keeps the price in check, at least to some extent. Here in our area I can pay as little as $3.62 a gallon or as much as $3.79 and that's within a five mile radius. I have Gas Buddy on my phone and it's pretty accurate when I'm looking for fuel.

According to BLS there will be 906k farm workers and ranchers etc. in 2018. So we will say 100k farms... there are 142 refineries rated by US EIA owned by 61 companies of which 15 make over 50% of the petrolium products. (I do not know if any are sub corps.) But I would think those 15 are more able to set prices than say 20k farmers.

[RustyJC]

Originally Posted by BCooke

But I would think those 15 are more able to set prices than say 20k farmers.

The refiners do not establish market price for their product any more than the farmer establishes market price for his crops. The marketplace does that - I believe I've already provided a link in this thread to Bloomberg.com's energy price commodity trading links.

That's why crude oil was in the mid-$30/bbl range during the peak of the 2008-2009 recession after being in the $150/bbl range just before the recession started in 2008. There's no way that the oil companies want these swings in their feedstock and corresponding refined product prices - market conditions led to both the peaks and valleys in pricing.

Despite their size, the oil companies are subject to market forces just like anyone else. If we're in the midst of a recession, individuals and companies will dramatically cut the consumption of fuel, plastics, lubricants, etc., so this depressed demand forces prices lower. That's why gasoline prices dropped as much as they did during the recession.

Rusty

[BCooke]

I might be missing something but I am looking at historical data.
A year ago the cost of crude and taxes were approx 84% of the cost of a gallon and this year the taxes and crude equate to approx 77%.
So I am in the camp of disbelief as according to the financial markets we are pretty much in a depressed world economy. Of course if they quit distilling I guess that would mean that the demand to production changed.
I think we have to agree that we disagree.

[RustyJC]

Well, here's the hard data.



These data are through calendar year 2010 and are discussed HERE.

Although it dates back to 2005, HERE is a lengthy report by the U.S. Government's Federal Trade Commission (FTC) on the results of its investigations over decades of gasoline price fluctuation - the report is titled "Gasoline Price Changes: The Dynamic of Supply, Demand and Competition". (Be aware - this is an approximately 3MB .pdf file)

Rusty

[BCooke]

That part I get. Not pumping more than is required. Where would you put excess.
My point is the price difference between refinery cost and pump price. I was looking at API published "US Pump Price Update" 8/24/11 where the approximate diff between crude and regular is somewhere north of a dollar this year when it use to average $.75.
http://www.api.org/aboutoilgas/gasol...riceUpdate.pdf
Again there will always be people like you who believe one way and people like me on the other side. If I knew what was definately right all the time, I would be working on getting thrown out of LasVegas for winning.