Anyone know why diesel is still a dollar more
12-14-2008, 06:51 PM
#1
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Anyone know why diesel is still a dollar more
This summer it was around $4.79 a gallon, now it is down but still nearly a dollar more than regular gas. Anyone know why such a premium? Sure it costs a bit more in the winter but...
Just trying to figure it out.
Just trying to figure it out.
12-14-2008, 07:41 PM
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Diesel is much less elastic than gasoline.
For anyone who is not familiar, here is an explanation of price elasticity of demand: http://en.wikipedia.org/wiki/Price_elasticity_of_demand
The reason being that 90% of diesel is consumed by entities that will not change their demand based on price. The trucks, ships, railrods, etc can not choose to travel less based on price. The private users of gasoline can react much more quickly and strongly.
For anyone who is not familiar, here is an explanation of price elasticity of demand: http://en.wikipedia.org/wiki/Price_elasticity_of_demand
The reason being that 90% of diesel is consumed by entities that will not change their demand based on price. The trucks, ships, railrods, etc can not choose to travel less based on price. The private users of gasoline can react much more quickly and strongly.
12-14-2008, 07:56 PM
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1987 SDL; 2001 Chevy 2500HD CC, 8.1L, Allison special order; 1970 GTO LS2, 4L60E, under construction
That and I would imagine taking the sulfur out of it for the new diesel adds more expense for the oil rapists..... I mean companies...
Not that long ago it was cheaper than basic regular gasoline...
Not that long ago it was cheaper than basic regular gasoline...
12-14-2008, 08:41 PM
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12-14-2008, 09:29 PM
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12-14-2008, 11:42 PM
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Taxes guys, taxes!
From what I read guys in California pay 30% more. I am sure the difference is in the government's take. Diesel is cheaper to produce. The Chinese term for diesel is "oil scum" or "oil trash" because it takes less efforts to refine than gasoline.
12-15-2008, 12:57 AM
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In Toronto Gold Diesel made by Sunoco is CD$0.88 a liter. Regular is CD$0.75 a liter. Punched the calculator and diesel is about 17% more.
From what I read guys in California pay 30% more. I am sure the difference is in the government's take. Diesel is cheaper to produce. The Chinese term for diesel is "oil scum" or "oil trash" because it takes less efforts to refine than gasoline.
From what I read guys in California pay 30% more. I am sure the difference is in the government's take. Diesel is cheaper to produce. The Chinese term for diesel is "oil scum" or "oil trash" because it takes less efforts to refine than gasoline.
Federal tax rates are 18,4 and 24,4 cents per gallon for gasoline and diesel, respectively. That is six cents per gallon higher tax on a product that costs about half as much to manufacture (not to mention that shell can now create diesel from liquified natural gas).
The answer lies not in taxes or in any controlling authority on which to place blame, it is economics at work. The positive aspect here is that the more diesel becomes a consumer item, the more elastic it becomes, and even though demand may increase, it will become more elastic and probably drive prices down.
12-15-2008, 03:57 PM
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It's senseless to compare diesel price with price for regular gasoline.
Engines that are efficient get that way with high compression. For gasoline engines, that means premium fuel and that's the fuel price to compare.
In the world of Mercedes, there are no models in which regular gasoline is permitted, another reason to not use it in comparison.
Diesel actually contains more energy per unit volume than any gasoline, so in that respect should naturally bring a higher price. Because of that energy premium, it requires less of it to do the same amount of work, so the price to some extent really isn't higher.
Finally, when you do get to the 16-1 and higher compression ratio spectrum, the wonderful torque benefits, i.e. running characteristics of the diesel engine are indeed something worth paying for.
It's pay more/get more in lots of respects.
Engines that are efficient get that way with high compression. For gasoline engines, that means premium fuel and that's the fuel price to compare.
In the world of Mercedes, there are no models in which regular gasoline is permitted, another reason to not use it in comparison.
Diesel actually contains more energy per unit volume than any gasoline, so in that respect should naturally bring a higher price. Because of that energy premium, it requires less of it to do the same amount of work, so the price to some extent really isn't higher.
Finally, when you do get to the 16-1 and higher compression ratio spectrum, the wonderful torque benefits, i.e. running characteristics of the diesel engine are indeed something worth paying for.
It's pay more/get more in lots of respects.
12-15-2008, 08:39 PM
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Exxon to boost diesel output 10%
Hot off the wires:
Exxon boosts diesel output as others scale back
Associated Press - December 15, 2008 7:55 PM ET
IRVING, Texas (AP) - Exxon Mobil plans to spend more than $1 billion in the next two years to increase its global production of cleaner-burning diesel.
Irving-based Exxon Mobil hopes to up its diesel production by about 10%.
Today's announcement from the world's biggest oil refiner comes as many producers and refiners scale back spending because of the sharp decline in crude prices.
The Associated Press reports dismal expectations for energy demand in 2009 and tight credit markets have put many big capital expenditures out of reach.
Exxon Mobil, which had $37 billion in cash at the end of the third quarter, will expand production at its refineries in:
Baytown, which is the largest U.S. refinery
Baton Rouge, La.
and Antwerp, Belgium.
Copyright 2008 The Associated Press.
Exxon boosts diesel output as others scale back
Associated Press - December 15, 2008 7:55 PM ET
IRVING, Texas (AP) - Exxon Mobil plans to spend more than $1 billion in the next two years to increase its global production of cleaner-burning diesel.
Irving-based Exxon Mobil hopes to up its diesel production by about 10%.
Today's announcement from the world's biggest oil refiner comes as many producers and refiners scale back spending because of the sharp decline in crude prices.
The Associated Press reports dismal expectations for energy demand in 2009 and tight credit markets have put many big capital expenditures out of reach.
Exxon Mobil, which had $37 billion in cash at the end of the third quarter, will expand production at its refineries in:
Baytown, which is the largest U.S. refinery
Baton Rouge, La.
and Antwerp, Belgium.
Copyright 2008 The Associated Press.
12-16-2008, 07:16 AM
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I paid $2.58/gallon today, thats the cheapest its been in almost two years. I'm not complaining. Fuel prices need to go UP by increasing the taxes so that consumption will go down.
12-16-2008, 09:58 AM
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Expanded news article on diesel fuel consumption and output
Oil giant to beef up diesel output
By BRETT CLANTON Copyright 2008 Houston Chronicle
Dec. 15, 2008, 11:19PM
Exxon Mobil Corp. will spend more than $1 billion to boost output of “clean diesel” fuel at three oil refineries, including its huge complex in Baytown, to meet upcoming U.S. regulations and feed rising diesel demand globally, the company said Monday.
The projects — also slated for facilities in Baton Rouge, La., and Antwerp, Belgium — will upgrade existing equipment and add 6 million gallons per day of production capacity, increasing the company’s worldwide diesel output by 10 percent.
It will also improve the Irving-based oil giant’s competitive position in diesel, usage of which is expected to grow much faster than gasoline in coming years, primarily due to growth in the developing world.
With the projects, Exxon Mobil will produce about 8 percent of the world’s diesel supply, up from 7 percent today, said Sherman Glass, president of ExxonMobil Refining and Supply.
“We think this is significant because, in our view, it reinforces our ongoing commitment to meet the needs of the marketplace,” he told the Houston Chronicle.
Other major refiners, including ConocoPhillips and Valero Energy, recently announced plans to delay or cancel refinery expansions. Volatility in commodity and capital markets are partly to blame, while a historic decline in gasoline usage this year also has raised doubts about long-term demand for petroleum-based fuels.
But Exxon Mobil said despite near-term challenges, long-term forecasts still support a strong demand for diesel.
“We’re seeing global demand for diesel growing much more strongly than gasoline, about 3 percent per year, whereas in gasoline we’re looking at between flat and 1 percent,” Glass said.
The faster growth rate stems largely from China, India and other nations whose economies have exploded in recent years, creating the need for construction trucks, public transportation and trains that all require diesel. In Europe, motorists are also turning more to diesel for personal vehicles.
In the U.S., where only 2 percent of the passenger car fleet uses diesel, the fuel represents about 20 percent of petroleum consumption, while gasoline is closer to 45 percent. In most countries, the balance is in favor of diesel.
In the U.S., where only 2 percent of the passenger car fleet uses diesel, the fuel represents about 20 percent of petroleum consumption, while gasoline is closer to 45 percent. In most countries, the balance is in favor of diesel.
Rising global diesel demand has kept diesel prices high despite a drop of more than $100 a barrel in crude prices this year that has cut gasoline prices to less than half their $4-plus peak this summer.
On Monday, the average national price for diesel was $2.57 a gallon, versus $1.67 a gallon for gasoline, according to AAA’s Daily Fuel Gauge survey. The Houston averages were $2.45 for diesel and $1.50 for gasoline.
Exxon Mobil’s projects also come as oil companies in the U.S. are being required to upgrade refineries to produce ultra-low sulfur diesel fuel that the industry calls clean diesel.
A 15 parts per million diesel sulfur specification that went into effect in 2006 has removed more than 99 percent of the sulfur in diesel fuel. When used in new diesel engines, the fuel significantly reduces tailpipe emissions.
Federal regulations demand that refiners exclusively produce the cleaner diesel by 2010.
The upgrade projects will convert the last of Exxon Mobil’s remaining U.S. diesel output to clean diesel but also increase production of it, Glass said.
In Baytown, a new desulfurization unit will add 65,000 gallons per day of capacity, while a similar unit in Baton Rouge will add 90,000 gallons per day, he said.
Exxon Mobil expects to begin installing the units next year and have them running by the end of 2010. During the projects, about 500 temporary construction jobs will be created in Baton Rouge and another 1,000 in Baytown.
The company also is likely to add a small number of permanent jobs at the refineries to operate the units and perform maintenance, Glass said.
brett.clanton@chron.com
By BRETT CLANTON Copyright 2008 Houston Chronicle
Dec. 15, 2008, 11:19PM
Exxon Mobil Corp. will spend more than $1 billion to boost output of “clean diesel” fuel at three oil refineries, including its huge complex in Baytown, to meet upcoming U.S. regulations and feed rising diesel demand globally, the company said Monday.
The projects — also slated for facilities in Baton Rouge, La., and Antwerp, Belgium — will upgrade existing equipment and add 6 million gallons per day of production capacity, increasing the company’s worldwide diesel output by 10 percent.
It will also improve the Irving-based oil giant’s competitive position in diesel, usage of which is expected to grow much faster than gasoline in coming years, primarily due to growth in the developing world.
With the projects, Exxon Mobil will produce about 8 percent of the world’s diesel supply, up from 7 percent today, said Sherman Glass, president of ExxonMobil Refining and Supply.
“We think this is significant because, in our view, it reinforces our ongoing commitment to meet the needs of the marketplace,” he told the Houston Chronicle.
Other major refiners, including ConocoPhillips and Valero Energy, recently announced plans to delay or cancel refinery expansions. Volatility in commodity and capital markets are partly to blame, while a historic decline in gasoline usage this year also has raised doubts about long-term demand for petroleum-based fuels.
But Exxon Mobil said despite near-term challenges, long-term forecasts still support a strong demand for diesel.
“We’re seeing global demand for diesel growing much more strongly than gasoline, about 3 percent per year, whereas in gasoline we’re looking at between flat and 1 percent,” Glass said.
The faster growth rate stems largely from China, India and other nations whose economies have exploded in recent years, creating the need for construction trucks, public transportation and trains that all require diesel. In Europe, motorists are also turning more to diesel for personal vehicles.
In the U.S., where only 2 percent of the passenger car fleet uses diesel, the fuel represents about 20 percent of petroleum consumption, while gasoline is closer to 45 percent. In most countries, the balance is in favor of diesel.
In the U.S., where only 2 percent of the passenger car fleet uses diesel, the fuel represents about 20 percent of petroleum consumption, while gasoline is closer to 45 percent. In most countries, the balance is in favor of diesel.
Rising global diesel demand has kept diesel prices high despite a drop of more than $100 a barrel in crude prices this year that has cut gasoline prices to less than half their $4-plus peak this summer.
On Monday, the average national price for diesel was $2.57 a gallon, versus $1.67 a gallon for gasoline, according to AAA’s Daily Fuel Gauge survey. The Houston averages were $2.45 for diesel and $1.50 for gasoline.
Exxon Mobil’s projects also come as oil companies in the U.S. are being required to upgrade refineries to produce ultra-low sulfur diesel fuel that the industry calls clean diesel.
A 15 parts per million diesel sulfur specification that went into effect in 2006 has removed more than 99 percent of the sulfur in diesel fuel. When used in new diesel engines, the fuel significantly reduces tailpipe emissions.
Federal regulations demand that refiners exclusively produce the cleaner diesel by 2010.
The upgrade projects will convert the last of Exxon Mobil’s remaining U.S. diesel output to clean diesel but also increase production of it, Glass said.
In Baytown, a new desulfurization unit will add 65,000 gallons per day of capacity, while a similar unit in Baton Rouge will add 90,000 gallons per day, he said.
Exxon Mobil expects to begin installing the units next year and have them running by the end of 2010. During the projects, about 500 temporary construction jobs will be created in Baton Rouge and another 1,000 in Baytown.
The company also is likely to add a small number of permanent jobs at the refineries to operate the units and perform maintenance, Glass said.
brett.clanton@chron.com
12-16-2008, 11:24 AM
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12-25-2008, 08:52 PM
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1987 SDL; 2001 Chevy 2500HD CC, 8.1L, Allison special order; 1970 GTO LS2, 4L60E, under construction
$2.41 per gallon in town here. Been that way for about two months now. On the other end of town, $2.99 per is the cheapest...
A bit of price gouging going on still.
As long as you don't own a MB that looks like a Volvo, I still think you'll be OK.
A bit of price gouging going on still.
As long as you don't own a MB that looks like a Volvo, I still think you'll be OK.
12-26-2008, 06:24 PM
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In Canada the differential between regular and diesel is a little over 17% which tells me that the much higher US prices are due to taxes. Gold Diesel (Sunoco) is 30% higher so it is likely to be due to company price gouging. They also make the Ultra gasoline which has the highest octane rating here.
12-26-2008, 06:28 PM
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2006 E320 CDi, 2008 3/4 Ton Suburban, 2007 "rice rickshaw" Accord 5 speed
We are all friends here and diesel enthusiasts. You two should make up at this happy festive time of year.
How is the 4L60E project progressing Gman?
12-27-2008, 10:32 AM
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1987 SDL; 2001 Chevy 2500HD CC, 8.1L, Allison special order; 1970 GTO LS2, 4L60E, under construction
What's the fascination with the TH350 with OD?
Car comes home tomorrow. Pulled the engine and trans last night and got them home.
Car comes home tomorrow. Pulled the engine and trans last night and got them home.
12-27-2008, 03:04 PM
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2006 E320 CDi, 2008 3/4 Ton Suburban, 2007 "rice rickshaw" Accord 5 speed
I dream about putting in the latest 6 liter truck Vortec with its 6 speed 90 series automatic into a 1996 Impala SS or a Cobra 5.4 liter supercharged into the Crown Victoria.
In reality a tuning box for my diesel is the most I am likely to do.
12-28-2008, 09:07 PM
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1987 SDL; 2001 Chevy 2500HD CC, 8.1L, Allison special order; 1970 GTO LS2, 4L60E, under construction
Got it home today. I'm going to start closing off all the holes in the firewall for the stock heater core, etc. hopefully this week. If I get anywhere, I'll try to post up a couple pics.
12-29-2008, 01:06 AM
#22
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I dream about putting in the latest 6 liter truck Vortec with its 6 speed 90 series automatic into a 1996 Impala SS or a Cobra 5.4 liter supercharged into the Crown Victoria.
Someday, I would love to drop a 12v Cummins 5.9 into an older German vehicle, such as a w140 S350D, assuming there was a way to get the front axle to hold 1100 lbs of engine weight. A "600SD" with 800 lb ft of torque would be sweeeet...
12-30-2008, 12:07 PM
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We are in the diesel forum afterall...why not a 6.6L Duramax into that Impala?
Someday, I would love to drop a 12v Cummins 5.9 into an older German vehicle, such as a w140 S350D, assuming there was a way to get the front axle to hold 1100 lbs of engine weight. A "600SD" with 800 lb ft of torque would be sweeeet...
Someday, I would love to drop a 12v Cummins 5.9 into an older German vehicle, such as a w140 S350D, assuming there was a way to get the front axle to hold 1100 lbs of engine weight. A "600SD" with 800 lb ft of torque would be sweeeet...
