| Author |
Message |
Chuck Lott (65.3.145.214)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Wednesday, May 19, 2004 - 3:46 pm: | |
Without getting into a big pissing match over policits and who's to blame, I'm curious about the difference in the cost of diesel fuel and gasoline.
Up until the recent rise in prices, round these parts, (Mid Ga.) regular grade unleaded sold for about $1.50 a gallon. Diesel fuel was about $1.40 or so at the truckstop, and $1.50 at the local station. (Gas and diesel prices were staying close to the same at the local)
We'll, now gas is $1.90 (and I know folks are paying lots more elsewhere)Diesel is $1.52 around the corner (Unless it went up today)
Soooo, Were we being screwed on diesel before and getting a break now, or, is the price of diesel somehow deflated compared to gasoline?
If so why? How could they sell for nearly the same for so long and now theres a $0.38 per gallon difference? If the price of crude is the indicator, shouldn't they still be close in price? |
Peter Broadribb (Madbrit) (67.136.86.149)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Wednesday, May 19, 2004 - 4:24 pm: | |
Chuck,
Around here, Kingman AZ, diesel has often been more than regular and the prices are never the same from one day to another.
One reason quoted to me was problems in Venezuela reducing the amount of oil available.
I hear that gas prices are climbing in Europe too.
Peter. |
bruce king (24.19.15.231)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Wednesday, May 19, 2004 - 4:26 pm: | |
the stations price their gas based on the last tankerload they got, typically. so the price difference may reflect last tankerload price, not current price.
when prices rise fast, the places that don't sell much diesel don't raise their prices as fast because it's a while between tanker deliveries for them.
and i'd love gas at 1.9. here in wa. state, it's $2.27 for gas, $2.10 for diesel. sucks.
www.flyingj.com for nationwide prices, btw. |
Sean Welsh (Sean) (64.81.73.194)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Wednesday, May 19, 2004 - 5:06 pm: | |
Chuck,
The daily price of either fuel (or the cost of the most recent tanker-load, if that's the way a station is pricing) is more a reult of market dynamics than anything else. Fuel is a commodity, and the supply/demand equation is in constant flux depending on many complex factors.
It's the same reason that, for example, the market prices of corn and wheat do not have a fixed relationship to each other.
The percentage of a barrel of crude that can be made into diesel versus gasoline is not fixed. These percentages, for any given type of crude, are fixed during the fractional distillation process, but subsequent "cracking" of the longer chains can be adjusted for different yield.
So, just as a farmer can choose to grow more wheat and less corn if he predicts, by harvest time, that the market will favor that mix, a refinery can choose to make more kerosene, for example, and less gasoline. As with growing grain, choices about product mix today must be made based on forecasting the market at some future date.
Since forecasts are never perfect, by the time fully refined product comes out of the pipeline, demand may be different than what's ready on the supply side. Thus, a price differential develops.
All that being said, it does require more raw material, more equipment, and more labor to make a gallon of gasoline than a gallon of diesel (even though a gallon of diesel has a higher energy content), so gas should be a tad more than diesel in a perfectly-forecasted steady-state market.
Bruce's observation about lower-volume stations resetting prices less frequently is also correct, although many retailers take quick advantage of rising market prices to raise their retail price even on stored inventory.
As long as we're posting web sites for fuel pricing, here's one from the AAA:
http://198.6.95.31/sbsavg.asp
This site lists the daily average price by state for regular, mid, premium, and diesel. Clicking on a state gives you a more regional drill-down.
-Sean |
Curious (68.243.54.71)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Wednesday, May 19, 2004 - 6:43 pm: | |
The main reason diesel is not reflecting the rates of gas is simple.. Truckers union and non union would all go on strike ending what economy there is now. |
TWO DOGS (65.179.201.102)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Wednesday, May 19, 2004 - 6:50 pm: | |
come on guys......we bombed them weird people,now we are rebuilding the citys even better than before....who do you think is paying for it....wake up America.....just remember...everytime you fuel -up....you are buying someone a new ak-47 |
Luke Bonagura (Lukeatuscoach) (209.247.222.95)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Wednesday, May 19, 2004 - 7:14 pm: | |
Hi Folks:
When I was operating coaches, I talked with several suppliers about the gyrations in Diesel prices. Here in the East, the same refinery equipment that produces Diesel Fuel, produces Home Heating Fuel. If we got an early "Cold Snap", then the refinery switched over to the production of Home Heating Oil, which caused the supply of Diesel to dwindle and the price went up.
Conversely, in the Spring, if we got a "Quick" warm up, the refinery went over to producing Diesel and our price went down.
I lived with that for more years than I want to think about. Larger companies Buy into Fuel Hedge funds and lock in their price for a set period of time.
If anyone really watches the airline industry closely, you have read that Southwest Airline, for example, has all of their fuel Hedged for 2004, most for 2005 and some for 2006, which enables them to keep their Low Fares.
Them with the money can do the "Fancy Dancing", and save money, the rest of us pay the pump price!!!
Here in South Jersey this A.M., regular was in the High 1.80's to low 1.90's, depending upon the stations that I passed and Diesel has only crept up to the low 1.60's.
Happy & Safe Bussin' to ALL!!!
LUKE at US COACH |
Tony (64.215.196.163)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Wednesday, May 19, 2004 - 7:28 pm: | |
I agree with two dogs, I wonder what out president has to gain from all the rebuilding he is doing with our money especially when some of our neighborhoods are worse off than what they leave after the bombing, this war Is worse than Vietnam, at least over there we didn't have to rebuild everything. and Its really bad shipping Gas over there and it one of the richest oil producing countries that there is, but I guess that comes from having a republican president, but look at the good part we only have to put up with him for 6 more months. but I wonder how much damage he can do In that length of time, Sorry but I just got off on the wrong foot. |
Stephen Fessenden (Sffess) (65.130.8.165)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Thursday, May 20, 2004 - 12:07 am: | |
I believe the difference in price between diesel and gas is tied to fears of truckers reactions. Here in Florida we have had long periods when the price of diesel is higher than gas, but every time fuel prices start rising the price of gas goes up first and later diesel goes up. It falls after gas falls and eventually ends up higher than regular again. I believe it is a careful effort to avoid any potential sympathy for action by truckers about fuel prices. The public is always gouged first so they have lost sympathy before diesel prices are raised, and on the way down, no one is complaining. Did you notice a couple of years ago that diesel was up in a few scattered states like Maine that would not have a major effect on the economy, as if there were a test market in raising prices being done. I don't think I am being paranoid to believe that the oil companies do not want a trucker reaction like the 70s and are careful to avoid it. Make the maximum profit without killing the market. |
Don KS/TX (66.82.9.34)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Thursday, May 20, 2004 - 6:25 am: | |
Well Stephen, you just might be correct. For some reason I cannot explain, I have noticed that Diesel consistently "follows" gasoline, in that it goes up AFTER gasoline and comes back DOWN after gasoline prices. |
BrianMCI96A3 (65.40.156.194)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, May 21, 2004 - 12:47 am: | |
Stephen, that makes a lot of sense to me... besides have you ever noticed that fuel prices can often rise like a rocket going up dramatically in the space of a week or two... I don't ever remember fuel prices that DROPPED like a rocket though.
Brian |
Doug Dickinson (Dougd470) (65.161.188.11)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, May 24, 2004 - 12:35 pm: | |
I agree with Luke. The price depends on the season and weather as well as everything else like a war here or there, and the relative value of the dollar.
In winter, the diesel price in Missouri is as high as gasoline. In summer, it is 30 cents or so lower. The relationship in your area depends on the state tax structure (some places, gas and diesel are the same price, others different).
Doug
St Louis MC9 |
Glenn (162.39.206.16)
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, May 24, 2004 - 10:54 pm: | |
Oil Shortage in America:
1.) A lot of folks can't understand how we came to have an oil shortage here in America. Well, there's a very simple answer... Nobody bothered to check the oil. We just didn't know we were getting low.
The reason for that is purely geographical. Our oil is in Alaska, Texas, California, and Oklahoma. Our dipsticks are in Washington DC. |
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