Which Location?
When will diesel prices start to fall?
- Thread starter 300D
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I will take a picture next time I will up at the pump and there will be a breakdown of all the taxes in a gallon of fuel. Furthermore here in CA Diesel drivers pay an additional $0.20/gallon for the ability to drive a diesel (because it is more polluting than a gasser)
sohccammer427
Veteran Member
According to GasBuddy:
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MORE VARYING PRICES WITH DIESEL
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Diesel fuel is typically more expensive than regular gasoline for a few reasons:
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1) It is taxed higher at the federal level than gasoline.
2) Refining diesel is more expensive than gasoline.
3) Fewer gas stations sell diesel fuel, making the distance from pump to pump even more expensive.
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The part about diesel costing more to refine goes against everything I've ever heard? Can that be accurate?
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https://www.gasbuddy.com/go/how-to-save-money-on-diesel-fuel/
.
MORE VARYING PRICES WITH DIESEL
.
Diesel fuel is typically more expensive than regular gasoline for a few reasons:
.
1) It is taxed higher at the federal level than gasoline.
2) Refining diesel is more expensive than gasoline.
3) Fewer gas stations sell diesel fuel, making the distance from pump to pump even more expensive.
.
The part about diesel costing more to refine goes against everything I've ever heard? Can that be accurate?
.
https://www.gasbuddy.com/go/how-to-save-money-on-diesel-fuel/
Lightflyer1
Top Post Dawg
$1.89 here today.
I was told that diesel is cheaper to refine than unleaded fuel. Hopefully some expert can chime in.
turbobrick240
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Refining diesel and gasoline used to be equivalent in cost- they are both produced in the same distillation of crude oil. But the ULSD standard requires an extra refining step to remove most all of the sulfur content. That drives up costs.
Tin Man
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I don't think so.
Ray is a refiner. Do you know Ray?
He wants to refine gasoline.
Does Ray get other stuff when he refines gasoline?
Yes he does. He gets lots of other stuff.
It includes stuff that sells for a higher price than gasoline, namely distillate fuel such as diesel and avgas etc.
Why is it more expensive? No not because it costs more to make because Ray is already committed to gasoline so he has to do something with the other stuff. Its because there is an oversupply of gasoline and strong demand for diesel.
Ray is happy because he can make a tidy profit selling diesel and keep his gasoline.
The world is a better place with Ray.
When kerosene, a close relative of diesel #2, came out in the 1800's refining a barrel of crude came with a waste product: gasoline. ULSD was only supposed to cost $.03-$.05/gallon more than LSD at the time when diesel was cheaper.
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TheMysticWizard
Member
Drove my Q7 the beginning of March for my commute since my A3 was in the bodyshop, therefore filled it twice in March. Previous fill was on 1/16.
With discounts (Safeway/Vons Loyalty and Gas Buddy - up to $.40/gal off):
Paid $3.36/gal on 3/3 (Likely $3.69/gal at pump)
and
Paid $3.28 on 3/13 (likely $3.59/gal)
Filled the A3 on 3/25 (with discounts):
Paid $3.09 after discounts ($3.39 at the pump)
Checking Gasbuddy now, $3.15 is the best going rate per gallon, with the station I usually visit at $3.29 (Chevron)
So, yeah. It's dropped in the heart of the bay as well, just not as far or quickly as the rest of the country, as usual.
Not driving much these days. Been out of work for 3 weeks as of today.
With discounts (Safeway/Vons Loyalty and Gas Buddy - up to $.40/gal off):
Paid $3.36/gal on 3/3 (Likely $3.69/gal at pump)
and
Paid $3.28 on 3/13 (likely $3.59/gal)
Filled the A3 on 3/25 (with discounts):
Paid $3.09 after discounts ($3.39 at the pump)
Checking Gasbuddy now, $3.15 is the best going rate per gallon, with the station I usually visit at $3.29 (Chevron)
So, yeah. It's dropped in the heart of the bay as well, just not as far or quickly as the rest of the country, as usual.
Not driving much these days. Been out of work for 3 weeks as of today.
willydiesel
Member
It's all fake. They purposely drive up the price of the diesel because they are all corrupt, they are trying to compel you into not driving a diesel, even though a diesel is superior in just about every way, but moreso because you have flexible fuel options, and you could store hundreds of gallons of it easily or even possible refine your own
willydiesel
Member
I mean come on, heating oil is 1.79. Diesel is 2.99. It's funny, the more crooked left wing politicians, the higher the price of diesel. The more misinformation of diesels you have.
Diesels have more emissions, what a crony statement made by crony people. It's a myth, at best, and beyond unreasonably ascientific at worst. Just remember, they made law and changed the industry based on their equations, in which they gave you the numberator but not the denominator. Gee yes, diesels with their terrible emissions! Ohh! Forget about the fact the vehicles use 40% less fuel if left in it's natural form, not destroyed by the heinous DPF. Yes, I'm sure Saudi Arabia, and Russia, and China are all very clean when they globally pump 30% more oil because of NOT using diesel and barge it thousands and thousands of miles across the ocean, billions and billions of gallons, yes, I'm sure that has no ill effect on the environment.
Diesels have more emissions, what a crony statement made by crony people. It's a myth, at best, and beyond unreasonably ascientific at worst. Just remember, they made law and changed the industry based on their equations, in which they gave you the numberator but not the denominator. Gee yes, diesels with their terrible emissions! Ohh! Forget about the fact the vehicles use 40% less fuel if left in it's natural form, not destroyed by the heinous DPF. Yes, I'm sure Saudi Arabia, and Russia, and China are all very clean when they globally pump 30% more oil because of NOT using diesel and barge it thousands and thousands of miles across the ocean, billions and billions of gallons, yes, I'm sure that has no ill effect on the environment.
sohccammer427
Veteran Member
Yep, I remember my Dad tell me way back when diesel tractors hit the market, they were practically giving diesel away. It was the waste from gasoline distillation. Either way it takes less processing to get from crude to diesel than from crude to gasoline.
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The GasBuddy statement is wrong.
turbobrick240
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It's the same process. It's called fractional distillation. Diesel fuel actually requires more processing now to remove almost all of the sulfur. But the main reason diesel is so much more expensive at the moment is all about supply and demand. Economics 101.
sohccammer427
Veteran Member
Good point. I guess ULSD is not your fathers diesel. lol More processing to remove the sulfur. Makes you wonder if there is a market for all the sulfur they capture.
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IndigoBlueWagon
TDIClub Enthusiast, Principal IDParts, Vendor , w/
Simple answer: Over the road taxes. With the possible exception of states that are CARB compliant, I don't think there's a conspiracy at work.
Diesel automobile drivers are hurt by the higher over the road taxes on diesel, which are, in part, intended to try and compensate for the higher wear and tear on highways caused by trucks. In some ways we're paying for the failure of good rail freight service in the US.
kjclow
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Turbodiesel beat me to posting this. Work from home got in the way!
For every barrel of crude, there is a certain percentage of diesel and gasoline that come off from boiling it. Of course those percentages vary depending on source of the crude.
Extremely simplified: Refining crude oil is basically boiling the snot out of it in a big distillation column and collecting the different prodcuts at the temperatures that they form back into liquids. So there is no way that you can refine a barrel of crude without getting both distillates and gasoline. Gasoline comes off the column earlier since it's more volatile.That's where the similarities end and complications start.
Since distillates are a heavier longer carbon chained molecules, they can be run through a different process called cracking. Cracking breaks the distillate products and forces more of the end product to gasoline. Most refineries making products for North America are set up this way. It gives them an artificially higher percentage of gasoline. It also gives them the option of swinging some production depending on which grade offers the better profit.
The hydrotreatment of distillates to reduce the sulfur is then run to produce ULSD. This step was only to add less than a cent to the finished price. IIRC, the switch over in 07, raised the price at the pump by about 10 cents. It also resulted in d2 consistanly running higher than Rug. I'm making the assumption that the refinereies ran stock so low that they realized the true demand on d2 in North America and that allowed them to maintain a higher profit margin.
The first statement is the only correct one. Even federal taxes on diesel are higher than gasoline.
For every barrel of crude, there is a certain percentage of diesel and gasoline that come off from boiling it. Of course those percentages vary depending on source of the crude.
Extremely simplified: Refining crude oil is basically boiling the snot out of it in a big distillation column and collecting the different prodcuts at the temperatures that they form back into liquids. So there is no way that you can refine a barrel of crude without getting both distillates and gasoline. Gasoline comes off the column earlier since it's more volatile.That's where the similarities end and complications start.
Since distillates are a heavier longer carbon chained molecules, they can be run through a different process called cracking. Cracking breaks the distillate products and forces more of the end product to gasoline. Most refineries making products for North America are set up this way. It gives them an artificially higher percentage of gasoline. It also gives them the option of swinging some production depending on which grade offers the better profit.
The hydrotreatment of distillates to reduce the sulfur is then run to produce ULSD. This step was only to add less than a cent to the finished price. IIRC, the switch over in 07, raised the price at the pump by about 10 cents. It also resulted in d2 consistanly running higher than Rug. I'm making the assumption that the refinereies ran stock so low that they realized the true demand on d2 in North America and that allowed them to maintain a higher profit margin.
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Tin Man
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I don't really know what the true production ratios of gasoline to diesel are but deduce that US refineries were leaning toward diesel production all along when they had a choice since gasoline is imported to the US while diesel is exported. This by itself explains the higher price of ULSD.
But the opposite may also explain how it works, but diesel would not be more expensive in that scenario.
But the opposite may also explain how it works, but diesel would not be more expensive in that scenario.
kjclow
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It's all done on a global trading basis now. European refineries have typically produced more diesel and sent excess gasoline to the US, while we did the opposite. At least in the past, most of the global refineries were located in the Gulf region of the US. We'd receive crude and then ship finished product around the world. The Saudi's were working on building a megasized refinery to make even more money off that barrel of crude. Russia has a lot of refineries but I think they still ship more crude to Europe than they finish.
AndyBees
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I've not read every post to this Thread. So, having said that, this my observation.
About the time of Katrina (2005) was when the price of Diesel went above RUG. As I recall, that was about the time EPA requirements for the ULSD come into play. And, seems about that time was when the refineries developed a method to squeeze a little more gasoline out of a barrel of oil. Those combined with the world market trading have hit Diesel pretty hard.
Back 40 years ago when I purchased my first VW Diesel, diesel fuel was dirt cheap.... it stayed cheaper on average until roughly 2005. I enjoyed the savings, especially with my on the job travel reimbursement.
Anyway, locally, what I've seen is as much as 50 cents per gallon cheaper Diesel Fuel in locations away from the Expressway (I-75). The big rig Truck Stops tend to have a monopoly on price. Contrary to popular practice, I do not patronize those places. I buy from the locals with the best price.......... and, no fuel issues!
About the time of Katrina (2005) was when the price of Diesel went above RUG. As I recall, that was about the time EPA requirements for the ULSD come into play. And, seems about that time was when the refineries developed a method to squeeze a little more gasoline out of a barrel of oil. Those combined with the world market trading have hit Diesel pretty hard.
Back 40 years ago when I purchased my first VW Diesel, diesel fuel was dirt cheap.... it stayed cheaper on average until roughly 2005. I enjoyed the savings, especially with my on the job travel reimbursement.
Anyway, locally, what I've seen is as much as 50 cents per gallon cheaper Diesel Fuel in locations away from the Expressway (I-75). The big rig Truck Stops tend to have a monopoly on price. Contrary to popular practice, I do not patronize those places. I buy from the locals with the best price.......... and, no fuel issues!
wxman
Veteran Member
According to the latest data from EIA (https://www.eia.gov/dnav/pet/pet_cons_wpsup_k_w.htm), U.S. weekly consumption of gasoline has dropped nearly in half (~5,000,000 barrels/day compared to ~9,300,000 barrels/day typically).
Distillate consumption has dropped some (from ~4,200,000 barrels/day to ~ 3,800,000 barrels/day). Jet fuel consumption has also dropped by nearly 50%.
Distillate consumption has dropped some (from ~4,200,000 barrels/day to ~ 3,800,000 barrels/day). Jet fuel consumption has also dropped by nearly 50%.
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AndyBees
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And, in order to maintain the demand for Diesel, Jet Fuel, etc., the complete barrel of crude oil must be distilled. Thus, there will be a point when the storage capacity for gasoline is overwhelmed!
Right now, at the "busy" truck stop (Pilot) on I-75 at my home town, the span between the price of a gallon of RUG and Diesel Fuel is about $1.15.
Lightflyer1
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and about $.30 to $.40 difference at the station near me.
Powder Hound
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69 cents at my favorite local station.
For an event as short as the current economic hiccup we're experiencing, refineries won't change their setup. If it was shown that it will be a long term problem, then refineries possibly could set up to process lighter fractions to combine them with heavier ones such that the mid-cut fraction output expands and the light weights diminish to try and balance output with demand. They do this in the fall every year anyway to produce more heating oil (same cut as D2). They don't need to change back yet. But how long is all this going to last?
Historically the light sweet crudes have always been favored because of the greater ease to produce large amounts of gasoline. If current consumption shows a glut of gasoline on the market, the price will probably continue to drop. To a point. It also might mean that the price structure of heavy vs light crudes will switch.
Pricing is the quickest and easiest way to respond to changes in supply and demand. Structural changes in refineries are much more expensive and take much longer to implement.
I doubt we'll see any refinery changes since the current trouble is going to be seen as temporary. What to do with a 50% drop in consumption of gasoline and kerosene resulting in no extra storage available (once we're full up) will be interesting to watch.
Cheers,
PH
For an event as short as the current economic hiccup we're experiencing, refineries won't change their setup. If it was shown that it will be a long term problem, then refineries possibly could set up to process lighter fractions to combine them with heavier ones such that the mid-cut fraction output expands and the light weights diminish to try and balance output with demand. They do this in the fall every year anyway to produce more heating oil (same cut as D2). They don't need to change back yet. But how long is all this going to last?
Historically the light sweet crudes have always been favored because of the greater ease to produce large amounts of gasoline. If current consumption shows a glut of gasoline on the market, the price will probably continue to drop. To a point. It also might mean that the price structure of heavy vs light crudes will switch.
Pricing is the quickest and easiest way to respond to changes in supply and demand. Structural changes in refineries are much more expensive and take much longer to implement.
I doubt we'll see any refinery changes since the current trouble is going to be seen as temporary. What to do with a 50% drop in consumption of gasoline and kerosene resulting in no extra storage available (once we're full up) will be interesting to watch.
Cheers,
PH
scooperhsd
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Saw a sign on my way to Sam's Club - D2 was down to $2.289/gallon ( was at least 40 cents higher prior to this Covid19).
turbobrick240
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In any normal situation cheap gas would increase consumption. I don't think that really applies to our current situation though. Refineries are having to reduce output and even shut down due to the lack of storage and poor profitability. It looks as though OPEC+ has agreed to stop flooding the market at least.
Powder Hound
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Yeah, well, what can they do? Once all the storage tanks are full and all the tankers are full and swinging at anchor while waiting to offload, which they can't do because there's no place to put it all, the only thing OPEC (and every other operator of a well head) can do is turn the valve toward off.
Cheers,
PH
Cheers,
PH
Mongler98
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Current futures price for a barrel of oil is less than $13. That is beyond silly. Beyond insane even. And extremely dangerous for many oil producing countries. Also companies like Diamond Offshore dirlling, Noble Corp, Nabors industry, and several others are heading for certain bankruptcy.
Expect gas prices to approach $1 (or less) a gallon in most areas if it stays this way for any length of time
Some places are already lower than $1.
Supply and demand 101 here.
Expect gas prices to approach $1 (or less) a gallon in most areas if it stays this way for any length of time
Some places are already lower than $1.
Supply and demand 101 here.
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IndigoBlueWagon
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The $13 price is temporary. However, I did have fuel delivered to my house last Thursday (I have a 275 gallon tank and pump), for $2.59/gallon, including all taxes. That's pretty low, and lower than I've seen at any local stations. Best I've seen near me is $2.65.
kjclow
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Mom told me that she paid under a buck for rug in Des Moines, Iowa on Saturday. I haven't seen it that low since the early 80s. I remember when the stations started pricing by the half gallon becasue thier pumps and signs did not have room for more than two points before the .9.
IndigoBlueWagon
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I recall driving to SC in August of '98 and filling with premium for under $1. Hadn't been that low in a while, and certainly hasn't since.