Diesel up $.10 over night. Why doesn't RUG change?

[Bora-chiara]

Driving to work this evening I see up to $3.79 from $3.69 overnight and RUG has been sitting happily at $3.15 for the past three weeks. Why would diesel change only?

 

[OilGuy]

Different markets, different supply, different demand.

 

[PDJetta]

This is why (from the EIA)

U.S. average retail diesel price continued its rapid upward climb advancing by 10.6 cents to 365.8 cents per gallon, reaching an all-time high for the second week in a row. The price was 103.2 cents above the price a year ago. Prices also reached all-time record levels in all regions of the country. On the East Coast, the price rose by 9.2 cents to 370.0 cents per gallon, 109.6 cents per gallon above the price last year. In the Midwest, the price jumped by 11.4 cents to 363.9 cents per gallon, an increase of 103.3 cents from a year ago. The price in the Gulf Coast area increased by 9.9 cents to 360.9 cents per gallon which was 102.2 cents above the level a year ago. The average price in the Rocky Mountains remained the lowest of any region last week although it moved up by 10.0 cents, to 357.3 cents per gallon. That was 91.5 cents above the price a year ago and 4.1 cents per gallon above the previous all-time high price for the region set on November 12, 2007. On the West Coast, the average price shot up by 12.7 cents to 373.6 cents per gallon, 94.1 cents above the price a year ago. In California, the average price surged, moving up by 13.1 cents to 380.3 cents per gallon, 90.6 cents higher than last year.

--Nate

 

[Drivbiwire]

Driving to work this evening I see up to $3.79 from $3.69 overnight and RUG has been sitting happily at $3.15 for the past three weeks. Why would diesel change only?

In order for a TDI to cost the SAME as a Jetta 2.5, we would have to be paying $4.30 vs $3.05 for unleaded (low grade).

Until I am paying MORE per MILE to drive a diesel I really don't care.

As of right now I know that my costs to drive a diesel are STILL

-8.6% LOWER for city driving
-16.3% LOWER for highway
-13% LOWER overall avg between city/hwy!

Yes that is with $3.05 unleaded and $3.79 Diesel (B20) as of last night.

Jetta 2.5L 25/31
Jetta TDI 34/46
Unleaded 87octane $3.05
ULSD/B20RME $3.79

DB

 

[Drivbiwire]

Diesel has lower overall volume in the pipelines and lower above ground reserves where we live. I would guess we have no more than 1-2 days supply so if fuel spikes we see a very rapid change in price.

Gasoline however has more storage so we may have 3-5 day supply thus reducing the speed that the prices will fluctuate.

Aviation fuel in some places varies wildly due to having only "hours" of supply on hand, most of the fuel is pumped directly from the refinery to the holding tanks where the "fuel Farm" has 100% turnover every 12 hours (or less).

DB

 

[Drivbiwire]

Fuel went from $3.79 this morning to $3.95 (ULSD/B20-RME) in the time it took to go out for breakfast.

RUG is still at $3.05.

Break even is $4.30 diesel vs Gas (RUG) at $3.05 to be the same cost per mile...It should take another day or two but RUG should be spiking here to around $3.30.

DB

 

[Dakota2004]

Diesel hit $4 bucks a gallon yesterday in Minot North Dakota. RUL is hanging in at $3.14

 

[akmike]

Diesel was 4gal here at some lil off the main road Shell last night. Didn't have cell handy or I would have taken a pic. I ended up at Cowboys/kagaroos depending on where you are in the country and bought at 3.75gal up from 3.35 about 14 days ago. Why sudden huge spike in prices?

 

[pakhribas]

Diesel - $412.99 - Grayling Michigan Truck Stop!

 

[pakhribas]

oops.....$4.12.....

 

[truman]

I think the oil companies sense a political problem if RUG increases, so they pass it thru on the D2 side of the equation where people won't notice so much. If RUG was at $3.50/gal, legislation would be in the works.

 

[Harvieux]

I think the oil companies sense a political problem if RUG increases, so they pass it thru on the D2 side of the equation where people won't notice so much. If RUG was at $3.50/gal, legislation would be in the works.

Do you really think those truck driver's and trucking companies don't cause a stir politically? Wait until every single item you buy goes up and up which is directly inflated due to fuel costs. By golly, have you seen the cost of sh!t paper lately? Later!

 

[WVU TDI]

$3.29 for Regular here, 3.99/4.09 for ULSD depending on where you go...

 

[Geo-1]

Cost of toilet paper is up? Perhaps we should save all those corn cobs from distillation of corn.....

 

[All of Us]

I agree with Truman! For most diesel users the fuel cost is a pass through to the final consumer. Yes, the truckers, railroads, barge companies, etc complain when the price moves, but they still pass the cost along to others. That price increase then fans out through the market and the consumer ends up paying pennies more for the goods shipped because of the volume fo "stuff" shipped. The consumer complains about higher prices on the goods they buy, but nothing like they complain when RUG goes up 5-10 cents a gallon. That happens and they want blood, or legislation. Either way the oil companies know who they can squeeze without alot of backlash and, unfortunately, we drive vehicles that use that particular fuel.

Dan

 

[Bob_Fout]

I think the oil companies sense a political problem if RUG increases, so they pass it thru on the D2 side of the equation where people won't notice so much. If RUG was at $3.50/gal, legislation would be in the works.

No one did anything a few years ago about higher fuel prices when this all started, whey would they now? Once we showed we'd roll over, it was done.

 

[VFchicago88]

D2 as high as 4.09 in chicagoland area, and my golf only gets 38 man combined mpg

sadly my company pays for gas based on RUG prices...so i dont get as much

 

[aja8888]

I think the oil companies sense a political problem if RUG increases, so they pass it thru on the D2 side of the equation where people won't notice so much. If RUG was at $3.50/gal, legislation would be in the works.

They may see a political problem, but what would they legislate? Price controls? I seriously doubt that! The Clintons tried it with flu vaccine years ago and the manufacture of it went overses with no quality control (remember that fiasco).

The ONLY thing the govenment has done to affect the price of fuel in the last 25 years is either tax it (raising prices) or requiring refinery and distribution emissions controls; environmental legislation affecting all US producers, causing additional price increases.

The state governments (at least in all the states I do business in) charge annual "emission fees" based on their annual emissions from production equipment. This has been in addition to the cost of obtaining emissions permits, annual permit fees (you ought to see what these amount to in California), and the high cost of adding emissions controls such as electrostatic precipitators, Klaus Sulfer Units, etc, etc. So the production industry has been faced with increasing manufacturing and tax costs besides the crude cost run ups.

Just remember, there are no free lunches here. People generally do not understand what the federal and state governments are doing to businesses to comply with environmanetal regulations and taxing policies.

So now there is talk of a new tax on oil company profits? OK, has ANY politician said what the tax money is going to be used for? I have not heard it! It certainly won't go to increased US crude exploration or production! And, that event (the taxing) will cause energy companies to raise prices even further to maintain their profits for funding finding new reserves. And if oil compaines do not replace their reserves (finding new = or > than what they sell), the eventually have no products to sell. That would be a calamity!

So, let the govenment "legislate" = Higher Prices at the pump!

 

[Dimitri16V]

D2 as high as 4.09 in chicagoland area, and my golf only gets 38 man combined mpg

sadly my company pays for gas based on RUG prices...so i dont get as much

that's a freaking joke too. IRS only raised the mileage compensation 2 cents to 50.5 c per mile.

 

[khale]

At the local Sheetz here in Winston-Salem it went from $3.69 to $3.99 overnight. RUG is still at $3.17. I think that the Sheetz and the Hess down the road have an agreement to keep D2 high. I choose to purchase elsewhere and not bother with them.

 

[Bora-chiara]

okay I get the reserve deal about diesel climbing first cuz I do NOW see RUG climbing now too. Not as much as diesel though...

So because I really don't understand, I have 3 q's.

1) What happened to diesel being cheaper then RUG anyway?

2) What can the market do to not allow this to happen instead of 'roll over' with it as Bob Fout said?

3) How are the people who say "It will be $4 by this summer" know this? Meaning, who makes the call that it is raised?

I read on here somewhere the other day we (US) are exporting Diesel because we are in abundance? Wait how is that helping our economy with this 'be self sufficent' roll we have been trying to go with?

Grrr...

 

[ruking]

San Jose/Bay Area CA, corner store prices: 3.49 RUG/ 3.69 PUB/ 3.95 D2.

We have HUGE refineries( Chevron, Shell, Valero, Tesoro, etc.) less than 55 miles away up Highway 680- Benecia/Martinez.

A HUGE regional terminal is less than 2 miles away.

 

[dlai]

ruking, where are those prices at? It's over $4 up my way...

 

[ruking]

ruking, where are those prices at? It's over $4 up my way...

Hi Dan!

I should have linked it. USA Gasoline MilpitasFri
10:53 PMzbear
1885 N Milpitas Blvd & Dixon Landing Rd , Milpitas, CA

http://www.sanjosegasprices.com/index.aspx?fuel=D&area=Milpitas&dl=Y&intro=Y

It is app 5 blocks off the Highway 880 off/on ramps.


Hope to see you at the next GTG! I hope all is well with your Passat!

 

[AndyBees]

My favorite station (Shell) went to $3.799 this week to be the highest priced in my area. That station had always had fuel at the lowest price. Luckily, I filled up nearby at $3.529 before that station went straight to $3.799.

Has to be gouging going on!

 

[mrGutWrench]

(snip) Has to be gouging going on!

__. Yes, and everytime that crude has gone up a quarter or it got 2 degrees colder in N England (home heating oil), they couldn't wait to jack up the price. Then when reality hits and competition makes them reduce the price. Wanna bet they drag their feet and hold it as high as possible?

 

[AndyBees]

Yeah, on my commute to and from work each day, I go by at least 14 filling stations and four truck stops. I notice price every day. I have seen RUG go up as much as 40 cents a gallon in one day....... two or three days later it will drop back. Two stations of the same name tend to be the ones that set the pace for seesawing the price...... Speedy! I avoid them until its an advantage for me.

I am convienced gouging is well and live.

 

[Drivbiwire]

okay I get the reserve deal about diesel climbing first cuz I do NOW see RUG climbing now too. Not as much as diesel though...

So because I really don't understand, I have 3 q's.

1) What happened to diesel being cheaper then RUG anyway?

ULSD... This a few years back accounted for approx 7% additional cost in producing the fuel.

When you have a given unit of oil you can only get so much from it in terms of final product. If Diesel fuel is one of hundreds of products produced from each gallon of oil. In a way Diesel is always fighting for it's portion of the crude. During the winter months diesel volume per unit of crude accounts for a lower percentage due to heating oil, gasoline usage is lowest in the winter so diesel ends up being the loser in terms of price starting around August thru April.


2) What can the market do to not allow this to happen instead of 'roll over' with it as Bob Fout said?

3) How are the people who say "It will be $4 by this summer" know this? Meaning, who makes the call that it is raised?

We live in a free market, supply and demand...The more we consume the higher the demand, the higher the cost of meeting that demand...it never ends until demand is reduced. It's as sure as death and taxes.

I read on here somewhere the other day we (US) are exporting Diesel because we are in abundance? Wait how is that helping our economy with this 'be self sufficent' roll we have been trying to go with?

I laugh when people say this as a negative, we produce/refine crude oil for other markets... It's like saying we shouldn't produce steel for sale in other markets because it may drive up the cost of our steel. The bottom line is that the export of refined petroleum does not impact the cost of the final product, the increase of consumption does that all by itself. If people regardless of location reduced consumption then the cost of the end product will drop...see the above comment on free marked economy.

DB

 

[Bora-chiara]

Thanks DB, I appreciate some light shed on those shadows. But still it still sucks. I'm used to paying ~$50 for a fill up, but I did calculations today and realized that 3 or 4 years ago it would cost me about $20 to fill up. I'm glad I didn't have a TDI back then to look back on fond memories....

 

[loneviking]

I was in South Lake Tahoe last night, and at several stations Diesel was $3.69, premium RUG was at $3.99. I've been hearing that RUG would wind up higher than diesel and I think it's starting to happen.