Fuel Prices............WHY ??

downtheroad wrote:
Way too complicated for me.
The reason diesel costs more that gasoline is because I have a diesel truck....simple.

That's my theory too :B

Scored today though.
Gas $3.24/gallon.......diesel #3.56/gallon
Using my bonus points.....paid $2.96/gallon ($.60 off per gal).
32 gallons. YEAH!
And didn't even have to worry about the AZ Tax guys :B

Inelastic demand is the big driver. Diesel consumption in the US is primarily from commercial trucking. The demand is there regardless of the price, therefore inelastic demand. Raising the price does not decrease demand, reducing the price does not increase demand. Therefore no increase in sales with a price reduction, so no advantage to the producer.

You can't compare European fuel prices with USA fuel prices. Too many other factors involved, mainly the taxes European countries place on fuel. 427435 (above)hit it on the head there. Also the fuel standards are different. Can't even compare fuel prices state-by-state here, especially California. They tax the******outta fuel there.

Oil crude yesterday was $80 for a short while, closed around $82. Today's close was a few pennies over $83.

Way too complicated for me.
The reason diesel costs more that gasoline is because I have a diesel truck....simple.

Almost everything shipped with in our borders is by truck in some way, shape or form. It either gets put in a semi and heads across the country from depot to depot and then is picked up for local delivery or piggy backs on a train across country and then is picked up at the rail yards by a truck for area/local delivery. Since the trucking companies are a captive market the oil companies are going to milk as much out of that industry as they can. Look at any truck shipped item and the bill of lading has a fuel surcharge on it. The trucking companies do not care they just pass the fuel cost on to the end user. That is why diesel prices have not dropped. Not to mention the fact that we can export as much diesel as we can produce. We are a net positive exporter of finished product. We export more refined product than we import crude oil.

You can't compare prices in England or Europe with the USA without backing out sales taxes.

For every litre of unleaded petrol bought in the UK, 61 per cent of the pump price goes to the government as fuel duty and VAT along with 59 per cent of every litre of diesel.

In the USA, the tax on diesel is only 24.4 cents.

Why diesel cost more in Around Campfire

Why diesel cost more in Tow Vehicles

Why diesel cost more Fifth Wheels

..and now we have one in Class A.

supercub wrote:
Gas prices have dropped nearly a dollar in our area..........and diesel has dropped about 10 cents.........why hasn't diesel prices maintained the same decreases as gasoline?
Brian

Here's a better one!

Diesel fuel in my area for farm machinery ( referred to as AG fuel) is 30 cents a gallon cheaper than home heating oil and they are exactly the same product and the answer I got then I jumped the fuel distributers backside for it was...."Because thats the way we price it"..!!:E

We Cant Wait wrote:
In addition to Diesel costing more in Europe, European Diesel does not have to be the Untra-Low Sulfur diesel that is mandated in the US. So selling non Ultra Low increases the oil companies profits even more because, Ultra Low Diesel has to be refined 3 times what old regular diesel does thus increasing profits EVEN more.

Uh triple refining increases COST three times which is a significant part of the reason diesel price went higher than gas and will in all likelihood stay there. Profit dollars may be higher but profit percentage relative to cost is probably the same. In other words the refiners are no better off with the higher price.

The oil industry has not built a new refining operation in the USA since the 70's.
We also export a lot of coal but apparently it is not in the top 10.

United States Top 10 Exports

The following export product groups represent the highest dollar value in American global shipments during 2013. Also shown is the percentage share each export category represents in terms of US overall exports.

1) Machinery: $213,108,199,000 (13.5% of total exports)
2) Electronic equipment: $165,604,449,000 (10.5%)
3) Mineral fuels including oil: $148,426,743,000 (9.4%)
4) Vehicles excluding trains and streetcars: $133,640,479,000 (8.5%)
5) Aircraft and spacecraft: $115,380,944,000 (7.3%)
6) Optical, technical and medical apparatus: $84,281,276,000 (5.3%)
7) Pearls, precious stones, precious metals and coins: $72,830,232,000 (4.6%)
8) Plastics: $60,836,970,000 (3.9%)
9) Organic chemicals: $46,510,903,000 (2.9%)
10) Pharmaceutical products: $39,742,717,000 (2.5%)