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

[ShinerBock]

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?

[ShinerBock]

FishOnOne wrote:


Not knowing what the PPM levels will be, I suspect the marine diesel regulation will not have an impact with "on the road diesel" prices.

I would have to disagree. As the article a later posted after my original past. It will more than likely increase demand and price for "sweet" crude for a period of time and then settle back down. This will also increase gas prices since gas is made from "sweet" crude as well.

Why Diesel Prices Are Set To Soar

[FishOnOne]

ShinerBock wrote:

FishOnOne wrote:


What is the current sulphur content and proposed sulphur content in PPM for marine diesel?

Not sure, but current sulfur content in Emission Controlled Areas(ECA)areas such as local waters in the US and EU is .1% which is lower than this .5% regulation. However, according to Shell, ECA's account for a much smaller percentage of fuel demand.


IMO 2020:
What’s next?

Shell wrote:
The transition to 0.5%S will cause more changes to global marine industry than the switch to the 0.1%S fuel in the ECAs. The impact of this transition represents approximately 75% of global marine fuel demand when compared to the demand of ECA.

This article from BP has a better map of ECA areas.

MARPOL 2020 and beyond

Not knowing what the PPM levels will be, I suspect the marine diesel regulation will not have an impact with "on the road diesel" prices.

[ShinerBock]

FishOnOne wrote:


What is the current sulphur content and proposed sulphur content in PPM for marine diesel?

Not sure, but current sulfur content in Emission Controlled Areas(ECA)areas such as local waters in the US and EU is .1% which is lower than this .5% regulation. However, according to Shell, ECA's account for a much smaller percentage of fuel demand.


IMO 2020:
What’s next?

Shell wrote:
The transition to 0.5%S will cause more changes to global marine industry than the switch to the 0.1%S fuel in the ECAs. The impact of this transition represents approximately 75% of global marine fuel demand when compared to the demand of ECA.

This article from BP has a better map of ECA areas.

MARPOL 2020 and beyond

[drsteve]

fj12ryder wrote:
I figure they'll either go up, or go down, or stay the same.

Bold prediction. Are you sure you want to go out on that limb?

[DirtyOil]

ShinerBock wrote:
Some of the articles I have read have stated that it won't just be a price increase, but a temporary diesel fuel shortage similar to the fuel crisis in the 70's if refineries do not have the capacity to refine enough low sulfur diesel.

If this is to be the case then you'll see a shortage in gasoline, all coming from the same barrel of oil. Articles like those just add to the excuses for driving the price up... news headline: "CEO of Dead Matter Energy Corp... stubs toe while chasing secretary, oil jumps to $200/bbl, on news toe will take 6 weeks to heal".

[FishOnOne]

ShinerBock wrote:
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?

What is the current sulphur content and proposed sulphur content in PPM for marine diesel?

[goducks10]

Glad I went back to a gasser.

[IB853347201]

Old-Biscuit wrote:
I can't predict what fuel prices will be next week, next month let alone come 2020.

X2!

[ShinerBock]

Some of the articles I have read have stated that it won't just be a price increase, but a temporary diesel fuel shortage similar to the fuel crisis in the 70's if refineries do not have the capacity to refine enough low sulfur diesel.

[Ductape]

fj12ryder wrote:
I figure they'll either go up, or go down, or stay the same.

Yep. I'll go out on a limb and say it will go up AND down. In no particular order.

[Tyler0215]

Up down or sideways, you gotta pay the price, or park tje rig.

[1jeep]

home heating season is coming ....the prices will only go in one direction and wont be down!

[Bionic_Man]

old guy wrote:
......oil companies have enjoyed 25 billion dollar profits over a 3 month period, they run wild when it comes to oil prices. .

There is so much more to it than profit $$s. Look at their margins. Way lower than almost any industry

[Old-Biscuit]

I can't predict what fuel prices will be next week, next month let alone come 2020.

[old_guy]

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.