For those that do not know, a few years ago the International Maritime Organization made a significant regulation that will have a big impact on everyone's wallet, especially diesel vehicles owners. They set a new standard for sulfur content in ship diesel fuel that they allow at their ports to .5%S by January 1, 2020. That is a significant drop from the current limit. While this will have an impact on everyone's wallet because this new fuel will be more costlier than current fuel used(which will increase prices on everyday goods), it may end up hurting or helping diesel owners according to some analyst.Many here may remember when the EPA set the ULSD standard and how it effected diesel prices due to the extra refining and purification needed, and causing "sweet" crude prices to increase even more. For years, on land diesel owners alone had to pay the added cost for all of the added refining equipment and processes since the low sulfur fuel was only for them. Diesel fuel refiners also switched to using more "sweet" crude (that was only previously used to make gasoline) due to its lower sulfur content versus less expensive "sour" crude it used before causing the demand(and price) for "sweet" crude to increase.There are people on both sides of this argument. Some are saying it will cause both diesel and gas prices to skyrocket because it would cause the demand for "sweet" crude to increase even higher. Others are saying that it will cause on road diesel prices to go down because now shipping will also be paying for the added refining processes spreading out the cost for the added piping and other equipment needing to purify "sour" crude. What is your take on it?

I figure they'll either go up, or go down, or stay the same.

It would help frame this question to know how much of the diesel fuel in the world goes to ships and I know that a lot of them use bunker oil anyway which is quite different from #2 road diesel. There may well be a short term effect while the market adjusts but I feel that long term other factors are going to be at least as important. Due to cost of fuel and environmental regulations I see a lot of engines going away from diesel anyway. If you search for "electric class 8 truck" you will find a lot of companies other that Tesla working on them. Buses are going to alternative fuels already. Ford's upcoming 7X V8 seems to be aimed at giving the diesel market for medium duty and smaller trucks some options. Even mining equipment seems to be pushing to get away from diesels. From the complaints I here from local farmers about the new diesel ag equipment I would be surprised if options are not offered for them soon. I guess the bottom line is that the future is pretty dang murky right now but I expect a lot of the demand for diesel to be gone within 30 years.

fj12ryder wrote:I figure they'll either go up, or go down, or stay the same.Great answer as usual from you. To the answer, well it seems obvious to me, prices will increase, is that not how the world works.

Unless producers of heavy/sour oil receive a higher price for their product (currently heavy/sour oil is sold per bbl cheaper(much cheaper almost 1/2 price) then WTI, hence why some refineries use the cheaper oil to offset costs of refining) Most refineries are set up to process WTI and/or heavy/sour crude... so world crude oil markets will determine the price, not the cost of processing.

The diesel price problem hopefully will be handled by free market forces and enterprising inventors who together will rein in prices. But if government forces generate too many regulations and/or try to use the new technologies to generate tax revenue - then results may vary. We could be economically choked or we could be wildly successful as a nation.

So what is your take on diesel fuel prices after 2020?

fj12ryder
Explorer III
Sep 04, 2018
I figure they'll either go up, or go down, or stay the same.
Groover
Explorer II
Sep 04, 2018
It would help frame this question to know how much of the diesel fuel in the world goes to ships and I know that a lot of them use bunker oil anyway which is quite different from #2 road diesel. There may well be a short term effect while the market adjusts but I feel that long term other factors are going to be at least as important. Due to cost of fuel and environmental regulations I see a lot of engines going away from diesel anyway. If you search for "electric class 8 truck" you will find a lot of companies other that Tesla working on them. Buses are going to alternative fuels already. Ford's upcoming 7X V8 seems to be aimed at giving the diesel market for medium duty and smaller trucks some options. Even mining equipment seems to be pushing to get away from diesels. From the complaints I here from local farmers about the new diesel ag equipment I would be surprised if options are not offered for them soon. I guess the bottom line is that the future is pretty dang murky right now but I expect a lot of the demand for diesel to be gone within 30 years.
cummins2014
Explorer
Sep 04, 2018
fj12ryder wrote:
I figure they'll either go up, or go down, or stay the same.

Great answer as usual from you.

To the answer, well it seems obvious to me, prices will increase, is that not how the world works.
DirtyOil
Explorer
Sep 04, 2018
Unless producers of heavy/sour oil receive a higher price for their product (currently heavy/sour oil is sold per bbl cheaper(much cheaper almost 1/2 price) then WTI, hence why some refineries use the cheaper oil to offset costs of refining) Most refineries are set up to process WTI and/or heavy/sour crude... so world crude oil markets will determine the price, not the cost of processing.
TakingThe5th
Explorer
Sep 04, 2018
The diesel price problem hopefully will be handled by free market forces and enterprising inventors who together will rein in prices. But if government forces generate too many regulations and/or try to use the new technologies to generate tax revenue - then results may vary. We could be economically choked or we could be wildly successful as a nation.
time2roll
Nomad
Sep 04, 2018
Those ships have at least three options. Low sulfur diesel, install scrubbers, or convert to natural gas. I agree that the additional cost to ship the fuel will increase the world prices. Refining capacity could be squeezed for some time as lower sulfur fuel is required. How much effect on price is anyone's guess. Supply side changes could mute the entire thing or could add additional pressure independent of the transport fueling issues.
Grit_dog
Navigator
Sep 04, 2018
My take is don't care since I can affect fuel prices.....meant can't affect fuel prices.
Everyone will be in the same boat.
Personally, high oil prices are a plus and a minus for me.
On the plus side, the Economy typically slows, and prices on luxury items, like vehicles, toys and property drop.....and I'm looking to upgrade truck and boat when that happens!! Also on the plus side, the industrial divisions of the company I work for get more work and that work is a higher profit than public and private civil and commercial work.
On the downside, the civil and commercial work slow down, so not as much work to go around.

We're fortunate enough that fuel prices aren't, or at least haven't been a major financial concern for us. However if they do, my views may change!
ShinerBock
Explorer
Sep 04, 2018
Here is article from those who think prices will increase. They do have some good points.

Why Diesel Prices Are Set To Soar
gbopp
Explorer
Sep 04, 2018
fj12ryder wrote:
I figure they'll either go up, or go down, or stay the same.

I figure they'll go up. So will heating oil.
old_guy
Explorer
Sep 04, 2018
I love the way oil prices just 20 or 30 cents a gallon jump up over night and if they go down it's 1 or 2 cents over a 6 month period. oil companies have enjoyed 25 billion dollar profits over a 3 month period, they run wild when it comes to oil prices. they added lead additives to gas and the price was 25 cents a gallon, now they have unleaded and the price is $3 something a gallon. what makes you think they will sell at a lower price.