current diesel fuel pricing
Locally, I'm seeing gasoline prices drop considerably, however diesel pricing doesn't seem to be going down as fast. Is the same thing happening in your area? It seems the price differential betwe...
Forum Discussion
valhalla360 wrote:
It's a market thing.
Diesel is primarily serving commercial operators. They have to buy X gallons per week regardless of the price. Efficiency is always important. Even with low fuel prices, fuel is still a major cost of business. The result is diesel prices tend to be inelastic. That means they tend to be slower to go up and down.
Gasoline is primarily used by private individuals. Particularly when fuel prices are low, they tend to be less focused on efficiency, so when prices rise, they have more ability to reduce consumption. It could be as simple as easing off the throttle. It could be taking the compact car instead of the big truck. It could be skipping an optional trip. With a major price spike like we just went thru, it's not hard for a typical family to cut 10-30% off their gasoline consumption. The result is gasoline prices tend to be more elastic and thus go up and down faster as they try to react to the changes in demand.
Thank you. That's a very good explanation of what I was asking in my OP. I really was not asking what the price is in a specific city or state, but why in general there is currently a large spread in gas vs. diesel prices.
In addition to the overall static consumption of diesel fuel for commercial shipping purposes, I would assume we are seeing a current trend of this going higher. My reason being we are seeing the supply chain open up after a year of issues, and then there seems to be less problem finding drivers for trucks. More products and more trucks on the road equals higher diesel consumption.
