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
JaxDad wrote:markchengr wrote:
A 42 gallon barrel of crude oil yields approx 20 gallons of gasoline and only about 10 gallons of diesel. In the past several decades, the demand for diesel has has grown more, relatively, than the demand for gasoline. It's a supply and demand thing.
That’s not quite accurate, a barrel of crude yields between 11 and 12 gallons of ULS diesel.
The other factor, albeit a small one, is that the Federal tax on diesel is 1/3rd higher on diesel than it is on gasoline.
There is also the seasonal demands which are opposite, people travel more in the summer and so use more gasoline, in the winter diesel is competing with consumption for heating as well as for motor fuel.
It's even more complicated.
- Different sources will produce different quantities. The oil extracted from the Canadian tar sands will not produce the same amounts as south Texas sweet crude. Different refineries are set up to handle different types of crude oil.
- There are different refining techniques that can result in different percentages. European has far more diesel personal vehicles and their refineries are set up to extract a larger percentage as diesel. In the US, diesel has historically been primarily for commercial, so the refineries are set up to get more gasoline.
Of course, the number of gallons out of a barrel is not something that is quick and easy to change. Over 20-30yrs, yes they can make modifications to follow demand but over a year or two...not so much.
PS: Heating fuel is far less of a market force today compared to 40-50yrs ago. Most furnaces have been replaced with propane or natural gas. Very few oil fired furnaces are left. Similarly, oil fired electric power plants are rare exceptions.
