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Fuels & Lubricants Discussion all about Fuels & Lubricants. synthetic oil, conventional oil, brands, change intervals, diesel grades, gelling and such debated items like that. Non TDI related postings will be moved or removed. This forum is NOT for the discussion of biodiesel and other alternative fuels.

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Old December 22nd, 2008, 12:14   #1
PDJetta
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Default Why Does Diesel Still Cost Less Than Gasoline In Other Countries?

This really bugs me. Maybe not in all countries, but in some, diesel still sells for less than gasoline. This also perplexes me. I just found this on the internet (it is current as of December 19th):

"SANTO DOMINGO. – For the ninth straight week prices on both types of gasoline, diesel, avtur and kerosene will fall slightly from Saturday 20 to Friday 26, but liquefied petroleum gas will remain unchanged.

The Industry and Commerce Ministry (SEIC) said a gallon of premium gasoline will cost RD$117.80, or RD$0.70 less, and regular will cost RD$108.00, or RD$1.00 less.

The gallon of regular diesel will cost RD$101.00, or RD$1.00 less and premium diesel will cost RD$109.00, or RD$1.00 less.

Avtur will cost RD$76.40 per gallon, or RD$3.85 less and kerosene will cost RD$96.10, or RD$3.90 less."

Diesel sells for 93% of what gasoline sells for in the Dominican Republic! At my local hess, D2 was 80% MORE than gasoline this weekend ($2.85 vs. $1.59)! What gives? I guess our exports of diesel are contributing to diesel costing less in other countries, but 50 - 100% more than gas in the USA.

I have noticed that in Europe a similar price ratio exists in many, if not most countries.

Also, notice the price of kerosene in the article. Its priced at even less than D2 (which is priced less than gasoline). At the two stations that cary kerosene where I live, its about $5 a gallon!

I know that in some instances, governments tax fuels differently, but I can not imagine that governments could subsidize the price D2 so much and retain a balanced budget.

If worldwide supplies of D2 are as tight as the experts portray, why is it priced below gasoline in other parts of the world?

Here is the link:

http://www.dominicantoday.com/dr/loc...-straight-week

--Nate
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Last edited by PDJetta; December 22nd, 2008 at 12:16.
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Old December 22nd, 2008, 12:37   #2
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My parents recently took a trip to NZ. Diesel pricing was below RUG there. I'm sure this is true in many parts of the world still. Here in the US, we are the victims of any number of influences.
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Old December 22nd, 2008, 12:57   #3
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Quote:
Originally Posted by FlyTDI Guy
Here in the US, we are the victims of any number of influences.
Well I am awful glad THAT was straightened out
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Old December 22nd, 2008, 12:59   #4
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Quote:
Originally Posted by JettaJake
Well I am awful glad THAT was straightened out
Intentionally vague... if I started listing them, well, I don't have all day...
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Old December 22nd, 2008, 13:34   #5
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I believe the conventional wisdom is that higher demand in the rest of the world has spurred US refineries to export more diesel. This creates scarcity over here and drives up prices. Also, diesel tends to be taxed more favorably overseas.
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Old December 22nd, 2008, 13:47   #6
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Quote:
Originally Posted by PDJetta
This really bugs me. Maybe not in all countries, but in some, diesel still sells for less than gasoline. <snip>
[1] market forces
[2] Taxes
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Old December 22nd, 2008, 14:01   #7
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I believe the following affects the spread in the U.S.:

1. taxes.
2. ULSD costs more to refine. Many countries permit higher sulfur content than the U.S. does, so the refining costs for their fuel is less.
3. Winter right now, and many homes in the coldest regions of the U.S. heat with home heating oil (i.e., diesel fuel) so there's higher demand in the U.S. right now. Higher demand = higher cost.

I'm sure there are other factors at play too.
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Old December 22nd, 2008, 14:03   #8
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Oh, and winterized diesel fuel costs more. I doubt they have much of a need for winterized diesel fuel in the D.R., so their fuel is probably cheaper to make than ours is right now.
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Old December 22nd, 2008, 14:08   #9
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Other countries subsidize diesel as it is critical to manufacturing/export industries. Many other countries use a lot more diesel relative to RUG and actually export their unleaded to the US (depressing our unleaded costs.) According to the Dept of Energy Energy Information Agency refiners in the US actually lost money on unleaded in November.
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Old December 22nd, 2008, 14:12   #10
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One other factor is the crack spread - how a barrel of oil is divvied up for various petroleum products. I'm not certain of this, but it could be a factor contributing to the greater spread in the U.S. For example, the U.S. has a much larger aviation system than does a country like the Dominican Republic, so some of the crude we import must be refined into jet-A. That competes with the crude that might have otherwise been refined into diesel fuel or another fuel. So it's really also a supply/demand thing, but just more from a micro level with how the barrel of crude is divided for all the different fuels and plastics and other petro-based items out there.
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Old December 22nd, 2008, 14:23   #11
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Now that 10% of unleaded is subsidized ethanol, that is another advantage denied diesel drivers.
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Old December 22nd, 2008, 14:29   #12
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Quote:
Originally Posted by notsofast
Now that 10% of unleaded is subsidized ethanol, that is another advantage denied diesel drivers.
Of course my gasser now gets at least 10% worse fuel efficiency with the new blended stuff, so in the long run it negates itself, both in cost and quantity of gasahol I'm burning.
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Old December 22nd, 2008, 14:34   #13
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when I got my golf in 01 I ran the figures and based my purchase on diesal being an average of 12cents a litre (45 cents a US gallon cheaper ) cheaper in northern BC and for most all of the time till mid 05 while I was driving for business such was the case and I figure I saved 17k over driving an SUV getting 25mpg .

Now its always 15cents a litre more expensive ... I wouldnt bother with the TDi if I ran the figure today

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Old December 22nd, 2008, 14:38   #14
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One of my favorite sites:
http://www.eia.doe.gov/bookshelf/bro...sel/index.html
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Old December 22nd, 2008, 14:49   #15
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Default Ulsd

I think it is the oil co. taking it out on us. When the EPA told them they had to make ULSD(<15ppm) for US. The oil co. said that to make it the $ would go up and there would be less availably. The LSD(<500ppm) was less $ to make and they, the oil co. had more of it.
The LSD was less then Reg. gas and now ULSD is more then Hi test. We get it jammed up you know were.
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