Why is diesel still high?

[SuiteSuccess]

Gasoline in our area now below $3.00 but diesel has not changed any.  Still $4.99/gal.  Change in blend from #2 to #1 should be over, why still expensive?

[Lou Schneider]

Supply and demand. Diesel inventories are still tight, largely due to a cold winter increasing the demand for home heating oil, a closely related product.  To make enough diesel and HHO, refineries are running flat out and are temporarily producing an excess amount of gasoline.  You can't distill a barrel of crude oil into a single product, you get a range of products from light distillates like naptha and gasoline to middle distillates like diesel and HHO to heavier distillates like grease and tar.

FWIW, I'm travelling through central CA and over the past two weeks the spread between gas and diesel prices have increased from approximately $1 a gallon to $2 a gallon.

Edited December 12, 2022 by Lou Schneider

[ddm502001]

According to reliable sources, Current Admin has been allowing shipment of Refined Diesel to S Am nations and S Korea at a reduced rate to overseas costs.  Not certain if under a treaty of some sort.

[pjstough]

7 minutes ago, ddm502001 said:

According to reliable sources, Current Admin has been allowing shipment of Refined Diesel to S Am nations and S Korea at a reduced rate to overseas costs.  Not certain if under a treaty of some sort.

What are you "reliable sources" and what nations is the Current Admin not allowing refined diesel to be shipped to?
Thanks!

[GlennWest]

Reliable source? Sadly news is more about ratings than facts. I question it all now.

[rickeieio]

Diesel around here, (Cincinnati area) ranges from $6.00 to $3.83.  I was going to run the KW over to Costco last week when it was $4.40ish.  Glad I waited.

Another driver of diesel demand is, well, more diesels.  Folks jumped on the diesel band wagon and have contributed to the demand.  Son in law was bragging about his new-to-him Mercedes diesel and it's great mileage.  I pointed out that his cost per mile is far above DW's car.

[Danfreda1]

Hey Rick the T/A in New braunfels Texas is 3.34 tsd now. Come on down and fill up. 

[Big5er]

Used my EFS card to fuel up in Baytown the other day for $3.37 a gallon.

Dan, I'm leaving Columbus tomorrow and heading west to I-35 and going south. I'll wave as I drive by. 

[SuiteSuccess]

22 minutes ago, Danfreda1 said:

Hey Rick the T/A in New braunfels Texas is 3.34 tsd now. Come on down and fill up. 

Dan,

If you don’t mind just get a 500 gallon tank and fill it up and bring it to our meet-up in March.  I’m sure it wouldn’t be much trouble would it? 😂😂

[hatrack]

TSD price in Kingston, TN is $3.31.. Suitesucess that fairly close to you.Speedway @ 140 and 40 is $3.372.

Ken....

[Kirk W]

Diesel at Murphy Oil (Walmart) near us is now $3.859 while regular gasoline is $2.699. So it is still $1.15 over gas.

[SuiteSuccess]

12 hours ago, hatrack said:

TSD price in Kingston, TN is $3.31.. Suitesucess that fairly close to you.Speedway @ 140 and 40 is $3.372.

Ken....

It is.  Thanks.

[ddm502001]

20 hours ago, pjstough said:

What are you "reliable sources" and what nations is the Current Admin not allowing refined diesel to be shipped to?
Thanks!

Current Admin changed EPA allowances that essentially quashed US Refining into Diesel, would need to rebuild at least three of seven shuttered refining facilities but cannot be due to EPA Guidelines to Update and Uprate the systems for environmental discharges which is outside of a ten year financial recovery value.  Family has been in the refinery industry as workers or repair staff close to a century.  With Brazil, Argentina, Columbia in S Am, and S Korea, Japanl the shipments of US Refined diesel abroad has not diminished but expanded where only two refineries are capable of delivering sweet crude Diesel (Aramco Product) and only three heavy crude (US/Canada oil) refined products out of the nearly two dozen, with many now closed completely, US Refineries.  US Deliveries are slowed by the continued pressure to feed the foreign consumers.

Edited December 13, 2022 by ddm502001

[pjstough]

2 hours ago, ddm502001 said:

Current Admin changed EPA allowances that essentially quashed US Refining into Diesel, would need to rebuild at least three of seven shuttered refining facilities but cannot be due to EPA Guidelines to Update and Uprate the systems for environmental discharges which is outside of a ten year financial recovery value.  Family has been in the refinery industry as workers or repair staff close to a century.  With Brazil, Argentina, Columbia in S Am, and S Korea, Japan the shipments of US Refined diesel abroad has not diminished but expanded where only two refineries are capable of delivering sweet crude Diesel (Aramco Product) and only three heavy crude (US/Canada oil) refined products out of the nearly two dozen, with many now closed completely, US Refineries.  US Deliveries are slowed by the continued pressure to feed the foreign consumers.

So your "reliable sources" regarding the Current Administration are family members?

So you like to see the Current Administration relax EPA regulations to make it easier for the refineries closed in 2020 to reopen?

And you would like the Current Administration to prohibit or slow down the sale of diesel overseas?

Interesting perspective.

[Ray,IN]

On 12/12/2022 at 10:51 AM, Lou Schneider said:

Supply and demand. Diesel inventories are still tight, largely due to a cold winter increasing the demand for home heating oil, a closely related product.  To make enough diesel and HHO, refineries are running flat out and are temporarily producing an excess amount of gasoline.  You can't distill a barrel of crude oil into a single product, you get a range of products from light distillates like naptha and gasoline to middle distillates like diesel and HHO to heavier distillates like grease and tar.

FWIW, I'm travelling through central CA and over the past two weeks the spread between gas and diesel prices have increased from approximately $1 a gallon to $2 a gallon.

Exactly! IMO the only way to change the current situation is to bring back rail transportation, which will greatly reduce truck transportation and lower diesel fuel costs.

In order of transportation costs, the lowest cost per ton/mile is by water, #2 is by rail. OTR trucking is a a distant #3.

reference: https://subjectquery.com/modes-of-transportation/

Edited December 13, 2022 by Ray,IN

[sandsys]

1 hour ago, Ray,IN said:

Exactly! IMO the only way to change the current situation is to bring back rail transportation, which will greatly reduce truck transportation and lower diesel fuel costs.

If order of transportation costs, the lowest cost per ton/mile is by water, #2 is by rail. OTR trucking is a a distant #3.

reference: https://subjectquery.com/modes-of-transportation/

Plus labor. It takes a lot more truck drivers to move the same loads as a few train engineers.

Linda

[ddm502001]

Mr Stough, NOT going to get into a political battle here, Family and literally Dozens of ex co-workers live in TX, OK, CA, GA, IL, LA and work construction trades within or in the actual refinery process systems I spoke of.  Not ALL of the US Refinery Fleet of 125(In Service) of the 130 the Energy Department shows actually produce Motor Fuels as Gas or Diesel, many produce Petrochemicals for other industries, further refine Light Ends for consumable gases or heavy oils for lubricants.  The Fuel Production Refineries are AT CAPACITY while the US Sells Fuel Oils to Nations that are not always aligned or in many respects Friendly to the US, Argentina, Peru and Brazil come to mind.  There are other fuel refining nations, leave those nations fend on their own in open markets and stop BEATING our Own people with high costs of transportation for the goods we use daily.  Japan is an Ally as is S Korea, we do not need to support fuels to other nations where DO need to supply our own services FIRST.

You wish to make it a Good aspect for the US current admin as opposed to what it really is believe as you wish, sorry though as it is what it really appears as, a beating upon the US Consumer.  I will not parry further.

Dave Miller

[rickeieio]

Perhaps some folks don't realize that "the USA" doesn't sell to other countries.  Rather, companies sell to other companies.  USA doesn't own wells or refineries, companies do, and their mission is to provide the stockholders with the best return on investment they can manage.  

Saying the US shouldn't sell to companies outside our borders would be like saying Ford or GM shouldn't export cars or trucks.  It's a world economy.

On a lighter note, I checked to see what our favorite fuel provider (Buc-cees) charges for diesel near London, KY.  Currently $4.99 while up I-75 a few miles it's under $4.00.  I think retailers have discovered that as long as they're not too out of line with the neighbor, folks will just buy it.

Edited December 13, 2022 by rickeieio

[Ray,IN]

I agree with most of what you said rickeeio, but there is no world trading platform for vehicles like there is for grain, and crude oil.

The U.S.A. does not export grain or crude oil. those are  purchased on the world-wide open market by  futures traders mostly, then said traders sell at the end of the futures contract for the going price.

Trading in futures is what bankrupt Flying J, which resulted in Pilot buying the privately-held company.

Edited December 15, 2022 by Ray,IN

[rickeieio]

2 hours ago, Ray,IN said:

but there is no world trading platform for vehicles

Agreed.  I used that as an example to show that goods and commodities are traded wherever there's demand. 

[pjstough]

On 12/13/2022 at 2:01 PM, ddm502001 said:

Mr Stough, NOT going to get into a political battle here, Family and literally Dozens of ex co-workers live in TX, OK, CA, GA, IL, LA and work construction trades within or in the actual refinery process systems I spoke of.  Not ALL of the US Refinery Fleet of 125(In Service) of the 130 the Energy Department shows actually produce Motor Fuels as Gas or Diesel, many produce Petrochemicals for other industries, further refine Light Ends for consumable gases or heavy oils for lubricants.  The Fuel Production Refineries are AT CAPACITY while the US Sells Fuel Oils to Nations that are not always aligned or in many respects Friendly to the US, Argentina, Peru and Brazil come to mind.  There are other fuel refining nations, leave those nations fend on their own in open markets and stop BEATING our Own people with high costs of transportation for the goods we use daily.  Japan is an Ally as is S Korea, we do not need to support fuels to other nations where DO need to supply our own services FIRST.

You wish to make it a Good aspect for the US current admin as opposed to what it really is believe as you wish, sorry though as it is what it really appears as, a beating upon the US Consumer.  I will not parry further.

Dave Miller

Provide me links to the changes in EPA rules, then we will see what I can glean from them.
My belief is that when the drilling for new oil gets back to where it was before it began to decline dramatically in March of 2020 or even higher, and those well come in, we will see and increase in suppy, and then the lowering of prices at the pump.

[ms60ocb]

What bothers me is the price difference, Just yesterday in LA or eastern Texas I saw $2 difference between gas and diesel, $1.30 was common . High diesel prices makes no sense as everyone pays for some diesel (everything you buy is transported by some diesel) but not gasoline. Lets get back closer to price per BTU pricing

Clay

[DJohns]

In Nebraska on I 80 at pilot gas is 2.48 while 20 miles away gas is 2.99. Don't tell me pilot is loosing money. As far as diesel most trucking companies have a fuel surcharge so they just pass on high fuel cost to the consumer  (us).

[pjstough]

1 hour ago, ms60ocb said:

What bothers me is the price difference, Just yesterday in LA or eastern Texas I saw $2 difference between gas and diesel, $1.30 was common . High diesel prices makes no sense as everyone pays for some diesel (everything you buy is transported by some diesel) but not gasoline. Lets get back closer to price per BTU pricing

Clay

It is my observation that retail pricing is based on "what the market will bear" and has little to do with BTUs per gallon or even the cost of production.

[rpsinc]

2 hours ago, DJohns said:

As far as diesel most trucking companies have a fuel surcharge so they just pass on high fuel cost to the consumer  (us)

I see those fuel surcharges on my invoices for materials in my construction business, but I have yet to see them reduce when diesel price goes down like $2/gal.  I understand the concept of passing those costs on to the customer BUT when I am working on fixed price bid jobs, I have to find ways to increase my efficiencies to offset the $ that my net profit gets hit with.  It would really help if we would all realize that at some point in time, work will slow down because companies will choose to reduce projects, either new construction or maintenance, due to higher costs that affect their bottom line(GP) and we will all be affected to higher degree than we are today.  Sometimes that includes turning down jobs because the travel & per diem costs outway the opportunity to pay my overhead and those pesky surcharges.

 

We all need to work together to flatten many of these inflation increases and when people talk about large corporations needing to return certain % profits, understand that many of us may own stakes in those companies too.  IRAs are used to invest in funds that may include some of those companies.  So when I say "we" I mean all of we.  We all enjoy lower prices and complain about higher prices, so working at changing some of our old habits and behaviors can be a part of the solutions needed to soften this economy.  This is not a political statement but rather one of choosing to be part of the problem or part of the solution.  Either way, we are all feeling the same pain at the pump.