Diesel fuel price vs. oil barrel prices

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martin2340

martin2340

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Joined
Feb 6, 2014
Posts
402
Location
Sanatoga, PA
I have noticed after reading the news that the price of a barrel of oil has been on a steady decline and at the pumps gasoline in PA has dropped .30 to .40 per gallon but diesel has barely budged. Does anyone know why that would be as I am confused. I thought that diesel was easier to convert from oil than gasoline. I am paying $3.59 per gallon for diesel and got gasoline for $2.66 yesterday.
 
I don't know the answer to your question, and I've often wondered that myself. Yesterday, I saw that the price of diesel at a Shell station here in San Diego (right off the freeway) was $4.79 a gallon, and a gallon of Regular gas was $3.69 at the 711 where I normally fill up... so count your blessings.

Kev
 
In PA, where the gasoline tax is the highest in the country, there is $0.222 more tax on diesel fuel.  In addition, heating fuel and diesel fuel is about the same thing and prices are higher in winter.

Yes, CA has even more tax on diesel than PA.
 
I don't know the answer either, but it's been that way for years, with gasoline prices changing at the drop of a hat and diesel changing MUCH more slowly. I've seen this not only in Colorado, but everywhere I've traveled. Perhaps (just a wild guess) it's related to giving truckers more stable pricing so their trucking prices are a bit more stable?
 
Larry N. said:
I don't know the answer either, but it's been that way for years, with gasoline prices changing at the drop of a hat and diesel changing MUCH more slowly. I've seen this not only in Colorado, but everywhere I've traveled. Perhaps (just a wild guess) it's related to giving truckers more stable pricing so their trucking prices are a bit more stable?
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and most truck lines fill up at places where they get rebates based on volume.  So that leaves the average guy with a diesel the only one paying the full price.
 
I can only assume that diesel prices are simply greed.  I would guess it is targeted at the trucking industry, that can pass the costs on to the consumers.  Meanwhile, regular gas in Indianapolis, is $2.39.  I'll keep my mouth shut  ;)
 
Diesel fuel is closely related to home heating oil.  With the cold weather descending on much of the country this is probably propping up prices as the demand for home heating oil increases.  Especially in the East where home heating oil is a popular choice.

Or to put it another way, it's likely diesel prices wound be heading upward now if the crude oil price remained the same.

What made the price of diesel fuel jump ahead of gasoline a few years back is the Federal government requirement for ULSD diesel fuel.  The extra steps needed to strip the sulfur out of the fuel raises the refining costs.

Gasoline isn't as closely related.  It's formed from the lighter distillates when crude oil is refined.  So it's price is less coupled to the demand for the heavier distillates that form diesel fuel and home heating oil.
 
Come to the UK, the diesel is only $6.75 per gallon here  :-\


Despite oil prices going down the diesel is going up.  The thought is that it is more environmentally unfriendly.  Not sure if this is really true though....
 
One thing that is often overlooked is that diesel fuel contains ~13% more BTU's per gallon than does gasoline.  Since what you're buying in either case is "energy", it's only logical that diesel should have a price premium of ~13% relative to gasoline independent of all other factors.  At $2.50/gal for gas, that would make the price of diesel ~$2.83 from that consideration alone.
 
Several reasons, some of which have already been mentioned here. The cost of the oil itself is just one factor.  Others include: Diesel taxes are higher in most states, demand is higher,  diesel is essentially #2 fuel oil with additives, so more subject to seasonal factors, and one more Big ONE:  There are no US export controls on diesel like there is on gasoline, so it can be sold worldwide.  Thus the UK price of $6.75/gallon is creates a a worldwide market for US diesel.    Until the world market price for diesel drops, the US price isn't going to change much.
 
While the price of diesel fuel in your area may still be higher than it was, I just traveled to Colorado and back to the Chattanooga area over a three week time frame. Going to Colorado I was paying anywhere from $3.26 to $3.59 a gallon. Coming back, I paid from a low of $2.99 to a high of $3.16. I did not stop at the same stations coming home so the stations I used coming home could have been lower three weeks earlier and I just didn't get to take advantage of it.
 
It's been dropping here in Florida as well, but not as fast or as far as gasoline.  It still remains well above the gas price too, and probably will for the indefinite future.

Long gone are the days of yesteryear when the US was awash in diesel that few people needed  Modern refining techniques makes it possible to convert a high percentage of a barrel of oil to fuel-grade gasoline, while demand for diesel fuel has in the US continues to climb steadily.  Refineries produce the mix of fuels that maximize their return on investment.
 
jackiemac said:
Come to the UK, the diesel is only $6.75 per gallon here  :-\


Despite oil prices going down the diesel is going up.  The thought is that it is more environmentally unfriendly.  Not sure if this is really true though....
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Jackie you are comparing apples to oranges.
 
jackiemac said:
Is your diesel different Tom?  Sorry if I am being a bit dippit  (stupid)....
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No but your taxes are substantially higher.  Oil is priced and sold in dollars.  When the dollar is stronger it cost those non-dollar based countries more for the same amount of crude.  When the dollar is weaker, imported goods cost us much more in the US. 

The US has among the lowest fuels taxes, excluding those countries that either produce or subsidize fuel.
 
Not to bring this up again but I just paid $2.99 in NJ my neighboring state. Taxes are much lower there and they pump fuel for you. No self service.
 
I would say back in the 60's there was a relationship but then the OPEC nations from which we get very little oil started pencil rattling and upping the price.  The KOCH brothers (Richest family in USA).  And other Oil Barons got the idea they had free reign to jack the price. and then Selected govermanaurement got the idea they  could jack the tax a well..  Some (like 20) years ago there was a Pump I regularry used that said something like "You are paying 87 Cents in tax on each gallon.

Today I'm sure it's a dollar or more

I remember filling my car one day (8.5 gallons on that ride. I pushed it in) and still not qualifying for the premium they gave out with a fill up of 3.00 or more.
 
Just returned to FL from a trip to Gatlinburg.  Diesel prices pretty much averaged around $2.99 per gallon in GA and TN.  Kroger was considerably cheaper for some reason at $2.76 per gallon.
 
That just sucks to be you. :D We're paying $1.79-$1.83 for gasoline, and $2.09-$2.39 for diesel in Oklahoma. No ethanol gas here is $2.30 +/- a bit. We're paying $3.85-$425 for 100LL avgas.
 
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