General Question

jholler's avatar

With the price of oil declining...

Asked by jholler (2389points) October 17th, 2008 from iPhone

why is diesel still so high? Isn’t it basically a byproduct of gasoline production?

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14 Answers

xxporkxsodaxx's avatar

I heard that there’s a certain thing in oil that makes diesel and that kind of oil is depleting, I think one reason the oil price is decreasing is because the way it looks is that the new president is going to make the oil companies drill on the home land or lose it and since we are going to have more oil the oil speculators are paying less, which obviously follows down the line.

laureth's avatar

People like you and me can choose to save money by driving less when gas is expensive. With the economy going down the crapper, they’re reducing the price of regular gasoline in hopes that we won’t do that.

However, diesel is the kind most used by long-haul transport. They can’t just decide to not go, because, y’know, the show must go on. They can also pass that cost on to their customers, who still want to buy things like bananas and videotapes. So since the demand doesn’t really go down, they can still charge the same high price.

Allie's avatar

I think it has to do with politics, too. You can bet that good ol’ Dubya is going to try to help his cronies in the gasoline industry make as much of a profit as he can before he’s out of office. I’m not saying that there will suddenly be a nosedive is gas prices after 11/4, but to a slight extent I think there is some gouging going on.
I also agree with laureth. If the demand doesn’t go down, then where is the push on businesses to lower the price? There isn’t one.

cheebdragon's avatar

That doesn’t make sense…..because not that long ago, diesel was cheaper than regular gas…

laureth's avatar

Diesel is likely cheaper to make than regular gas. I mean, Rudolf Diesel designed his engine to run on vegetable oil, or whatever heavy thick goo was around.

Allie's avatar

Diesel lasts longer in autos with fairly good mileage. My mom and I have the same kind of car, but hers is a diesel and mine isn’t. She gets better gas mileage which means she doesn’t have to fill up as often. Maybe it’s more expensive because some of the diesel users don’t fill up as often?

Cheeb: Lucky you, diesel was never cheaper than regular unleaded here. =(

marinelife's avatar

According to this ABC News story from the 15th, diesel prices are dropping and will drop more as they ramp up diesel production.

funkdaddy's avatar

I wasn’t able to find it in a quick search but I seem to remember there being two differing methods for refining petroleum for fuel. One (common in the US) produces less diesel than the other (common in Europe) while producing more gasoline. Since there haven’t been refineries built in quite a while we would seem to be stuck with a limited amount of diesel production here in the US while the engines have become more desirable and common for consumers and the trucking industry. This may mean the supply is limited, driving prices up to a certain extent and reversing the price advantage per gallon from diesel to unleaded.

If I remember right the article determined there was a still an overall cost advantage to diesel in the US because of the more efficient engines (so $/mile still went the way of diesel).

Reading wikipedia – Diesel it looks a though another reason for the price increase is the fuel has to go through additional processes due to more stringent emissions standards.

AstroChuck's avatar

@Allie- You are wrong. You are pretty young and maybe haven’t been driving long enough to remember, but this old timer has been driving for thirty years and, as you know, I live 20 minutes away. Until a few years ago diesel was always less expensive than gasoline. And not just here in NorCal, but the rest of the country as well. It costs much less to refine. Big oil just figured that another way to pad their fat wallets was to charge more for diesel. We can save money for fuel by just driving less but what can truck drivers do? The have no choice but to pay.

Allie's avatar

I stand corrected then. Sorry.

mea05key's avatar

It takes time for the diesel price to drop following from drop of crude oil price. Diesel actually is a more efficient petrol in terms of power. It have the potential to generate more power that is why it is being used in the indutry and for heavy duty trucks. However, they do result in more pollution than the gasoline. Since we are living in the age of global warming many countries have policy to take up measures to reduce the pollution and one of them is to use gasoline which has benefit towards the envoronment. Nowadays diesel price are higher than gasoline because of many reasons. Researches on diesel fuel have result in lower sulfer diesel which reduces the impact towards the environment and coupled with its ability to generate more power the diesel becomes a more popular choice. The diesel tax is also usually higher especially in europe and US market. And also depending on the current government incentives and the automobile research policy. Some country may pay more attention in researching diesel engines thus giving rise to the diesel fuel price.

AstroChuck's avatar

@Allie- Okay. I’m going to accept your apology this time.
But let’s not let this happen again.

Allie's avatar

:p Yes, sir.

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