$1 difference between gas and diesel, WHY ??

[supercub]

The best I can remember, when diesel was $4.00 a gallon, wasn't oil something like $110 a gallon? Now oil is around $60 a gallon and diesel is around $3.75 here in central CA. Can someone explain this to me? Nearly 1/2 of what a barrel use to cost, yet the price of diesel is nearing the highest ever prices.
Another weird thing is, a few months ago, diesel and gas (again here in central CA) were the same.........now gas is a $1.00 cheaper the diesel at the major truck stops. What gives??

[rk911]

tatest wrote:
Oil was never $110 a gallon. I don't remember it ever reaching $110 a barrel (42 gallons). Product prices go up and down with crude oil prices, but prices for which product go up and down with supply and demand. Diesel is the same fraction as fuel oil for heating and electrical power generation, demand changing seasonally for both markets, tending to be higher in winter. Gasoline demand peaks during summer months with vacation travel and heavy use of automobile air conditioning in stalled traffic.

In fractional distillation, the proportion of different fractions (gasoline, jet fuel, kerosene, diesel and fuel oil) depends mostly on the crude oil input, but can be adjusted by more expensive secondary processes to produce more of one fraction than another.

Thus diesel and fuel oil cost less relative to gasoline when gas is in higher demand and more costly methods are needed to produce it, but the balance shifts in the other direction when fuel oil is needed for heating and electric power generation, and gasoline is been sold out over overstocks.

Add to this, the markets are global. Crude production is global, refining is global, consumption is global. Transportation costs are on the order of 1/10th of production and refining costs, so the seasonal cost of diesel fuel in California might be determined by the market for fuel oil in China.

yup. and when you hear financial reports on the 'price of oil' those are really oil futures which may change. those reports are good in showing trends but not actual prices.

Check this out

[Hikerdogs]

Gonzo42 wrote:
There is now, I read, a proposition in the upcoming election to place the fuel taxes in a dedicated account to be used ONLY for transportation projects, just as it was advertised for at least 40 years(that I have complained).

It is stated that it is the purpose to prevent diversion of those taxes to pet projects. One only hopes for truth on this, but only time will tell.

Gov. Moonbeam's new cap-and-trade taxes are a hidden tax. It can be raised at any time without notice, and for any amount.

DOES ANYONE KNOW HOW MUCH THAT TAX IS? I don't, and further, I don't know how to find out.

Several years ago Wisconsin had that exact type of fuel tax. It was a dedicated fund for road maintenance and construction. The fund actually had a surplus for many years.

However when times got a little tough the legislature changed the laws and raided that account to fund pet projects. Now the roads are in poor shape and there is a road maintenance budget deficit. The same people that changed the law and raided the fund are now blaming the current administration (elected after the fund was raided) for the poor state of the roads.

[Hikerdogs]

rk911 wrote:

Hikerdogs wrote:
...The sad part is the home heating oil dealers are considering the difference as a "delivery charge". The same thing happened a couple years ago with propane. If you went to the dealer and had a tank filled it was $1.94 a gallon. If you had it delivered to your home it was $3.09 a gallon.

so there shouldn’t be a cost for delivery???

I have no problem with a delivery charge. However the delivery charge in this case was 1/2 of the cost of the product. Charging $1.15 per gallon to deliver a product that sells for $1.94 per gallon is a bit excessive

[tatest]

Oil was never $110 a gallon. I don't remember it ever reaching $110 a barrel (42 gallons). Product prices go up and down with crude oil prices, but prices for which product go up and down with supply and demand. Diesel is the same fraction as fuel oil for heating and electrical power generation, demand changing seasonally for both markets, tending to be higher in winter. Gasoline demand peaks during summer months with vacation travel and heavy use of automobile air conditioning in stalled traffic.

In fractional distillation, the proportion of different fractions (gasoline, jet fuel, kerosene, diesel and fuel oil) depends mostly on the crude oil input, but can be adjusted by more expensive secondary processes to produce more of one fraction than another.

Thus diesel and fuel oil cost less relative to gasoline when gas is in higher demand and more costly methods are needed to produce it, but the balance shifts in the other direction when fuel oil is needed for heating and electric power generation, and gasoline is been sold out over overstocks.

Add to this, the markets are global. Crude production is global, refining is global, consumption is global. Transportation costs are on the order of 1/10th of production and refining costs, so the seasonal cost of diesel fuel in California might be determined by the market for fuel oil in China.

[Chum_lee]

supercub wrote:
The best I can remember, when diesel was $4.00 a gallon, wasn't oil something like $110 a gallon? Now oil is around $60 a gallon and diesel is around $3.75 here in central CA. Can someone explain this to me? Nearly 1/2 of what a barrel use to cost, yet the price of diesel is nearing the highest ever prices.
Another weird thing is, a few months ago, diesel and gas (again here in central CA) were the same.........now gas is a $1.00 cheaper the diesel at the major truck stops. What gives??

Easy. Supply and demand. Others have previously stated that diesel fuel, jet fuel, and home heating oil are essentially the same thing, chemically, it just takes some minor changes at the refinery to determine the exact product. The entire northeast US is currently under a major cold front causing an increased demand for home heating oil. The futures market also plays a role so pricing in local markets gets volatile and complex real fast.

In +-2007 when crude oil was selling at about $150 a barrel, gasoline in CA was about $4.75 a gallon. Go figure! Recent changes at the CARB now require ultra low sulfur diesel which as I understand requires additional refining steps (expense) to remove for on road diesel fuel. It's funny but ships at sea still burn bunker oil which is the bottom of the vat (cheap tar like junk) as far as oil refining goes.

Chum lee

[Larry-D]

In TN diesel has a higher sales tax because, as we all know only trucking companies buy diesel. The higher tax rate went into effect July. The sales tax on gasoline was also raised but not as much. The last time they raised the tax the money was strictly for road maintenance. That worked really well and TN had some of the best roads.....until they raided the fund and diverted it to balance the state's budget year after year. So now we have to play catch up.

[Trackrig]

Just fueled up the truck at Fred Meyer's in Anchorage and the price of DIESEL WAS LESS THAN GAS. Gas was $2.93 and diesel was $2.91.

Bill

[Gonzo42]

Price of oil is quoted per barrel, not per gallon. Minor mistake.

[Executive45]

SidecarFlip wrote:

ROBERTSUNRUS wrote:
🙂 Hi,


"Because they can."

Exactly. It's private enterprise and they charge what the market will bear and it's a 'must have' so it's a stick it to you commodity.

Hope it feels good.

NOT exactly! The REAL reason is not because they CAN, it's because Californian's will PAY it. Until the real voters in Cali, that's the voters less the illegals, felons and the dead, step up at the polls, and demand better representation, the tax collectors will continue to have a field day. Someone has to pay for dam repairs and a bullet train to nowwhere....Dennis

BYW - Diesel in Arizona is $2.49/gal. Gasoline is $2.08/gallon

[Passin_Thru]

Don't live in Ca and I'm not in Ak. They charge it because they can. It's a rip. I used to haul oil field liquids. Diesel is a byproduct. We hauled natural gasoline, (free gas after you use some to boil off water) and short crude oil we called Alky Feed which is water gas and some oil with a stinky algae in it. Taxes will climb on fuel now as the Govt is screwing around getting roads fixed and cutting taxes for the rich.

[RinconVTR]

Supply and demand....supply and demand.

Diesel (fuel oil, aviation fuel, and other similar weight fuels) are in very high demand right now.

[buta4]

supercub wrote:
The best I can remember, when diesel was $4.00 a gallon, wasn't oil something like $110 a gallon? Now oil is around $60 a gallon and diesel is around $3.75 here in central CA. Can someone explain this to me? Nearly 1/2 of what a barrel use to cost, yet the price of diesel is nearing the highest ever prices.
Another weird thing is, a few months ago, diesel and gas (again here in central CA) were the same.........now gas is a $1.00 cheaper the diesel at the major truck stops. What gives??

$110 a gallon? $60 a gallon?

[rk911]

Hikerdogs wrote:
...The sad part is the home heating oil dealers are considering the difference as a "delivery charge". The same thing happened a couple years ago with propane. If you went to the dealer and had a tank filled it was $1.94 a gallon. If you had it delivered to your home it was $3.09 a gallon.

so there shouldn’t be a cost for delivery???

[bob213]

Branson N Tucson wrote:
Your stupid governor

Yes and he's just getting started. If the Cap and Trade (Carbon Tax) goes into effect it could add between 46 and 76 cents per gallon in the next 10 years.