Alright. What's up with the price of diesel??!!!!

badshotbob · 10-21-2005, 06:16 AM

Regular around here is $2.55 on the low end, $2.69 on the high end. Diesel ranges from $3.49 to to $3.55. HA? WHAT? A whole freaking DOLLAR???? Are you kidding me? WHY?

What not a better way to spin the country into a recession than to hit the trucking industry hard.

I've parked my diesel for a spell and started driving my wife's truck. Here's a problem for all you smart people: I drive 2,000 miles per month. My truck gets 19mpg, my wife's 15mpg. Which is cheaper to drive? Let's say gas is $2.60 and diesel is $3.50.

And if you can answer me why diesel is so much higher than gas, I'll consider you smarter than me.

Sswpriz · 10-21-2005, 06:21 AM

Quote:

And if you can answer me why diesel is so much higher than gas, I'll consider you smarter than me.

Because the oil companies say it can be...and maybe they all need new cars this month ?

underdog · 10-21-2005, 06:53 AM

The explanation from the oil industry is that the demand for heating oil in the NE has forced up the price of diesel since they are similar products.

My take is that crude is much lower today than at anytime in the past few months and diesel remains one of the lowest cost fuels to produce. Their manufacturing costs have decreased and retail prices increased. What does that say?

I think because so much of diesel use is commercial, the demand is much more inelastic than for gasoline so the market will allow them to charge whatever. For a long time gasoline demand was the same. Prices went up with crude and folks kept on consuming the same amount despite the price-- until we hit the $3 mark and when folks backed off and demand dropped just a little, we saw prices tumble.

I don't think we'll see this with diesel. I just went over to Bloomberg and checked prices. They don't quote for diesel, but do for heating oil and prices are similar. Today's heating oil futures are $1.84 and gasoline is $1.60. Yet look at the disparity in the retail prices.

jackalope · 10-21-2005, 09:14 AM

Quote:

ORIGINAL: badshotbob

Regular around here is $2.55 on the low end, $2.69 on the high end. Diesel ranges from $3.49 to to $3.55. HA? WHAT? A whole freaking DOLLAR???? Are you kidding me? WHY?

What not a better way to spin the country into a recession than to hit the trucking industry hard.

I've parked my diesel for a spell and started driving my wife's truck. Here's a problem for all you smart people: I drive 2,000 miles per month. My truck gets 19mpg, my wife's 15mpg. Which is cheaper to drive? Let's say gas is $2.60 and diesel is $3.50.

And if you can answer me why diesel is so much higher than gas, I'll consider you smarter than me.

Since I'm bored right now and have nothing to do, I can help you out in figuring which is cheaper.Assuming gas is $2.6 and diesel $3.5 and that your drive 2000 mi/month and taking into account the mpg's that you gave:

your total cost per month in gas driving your wife's truck is
$346.66

your total cost per month when driving your truck is
$368.42

It's cheaper to drive the wife's truck only by about $20 a month.

Hope it helps you out a little. Man, I have too much time on my hands today.

Tazman · 10-21-2005, 10:41 AM

Very simple answer Badshot, it is called the oil industry price gouging, which when it comes to the millions contributed to both political parties by the oil companies will basically be ignored, given lip service, but ignored![:@]

underdog · 10-21-2005, 11:36 AM

Taz, You seem to imply there is some complicity here between Congress and the oil companies on the retail price of fuel when there isn't any shown by anyone anywhere. What laws are the oil companies breaking and what would you have Congress do?

I see the free market at work. Adam Smith's invisible hand. One man's price-gouging is another's excellent markup. Look at what happened when the American consumer backed off purchasing gasoline a little bit. Prices tumbled.

One thing encouraging for the consumer is how the speculation is being driven out of crude prices. Despite the disruption and shock affect of Katrina and Rita, prices have dropped from $70 to less than $60 per barrel and inventories have increased. Stock prices of oil companies have dropped 7-8% in the past several days.

I drive a diesel truck and don't like the high prices any better than anyone else. I don't think current prices are justified, but I don't see conspiracies where none exist. It's capitalism at work and that is the best economic system in the world.

bawanajim · 10-21-2005, 11:57 AM

Hey U.D. take a look at the energy bill wya just signed and tell me who get the biggest tax breaks!

I will clue you in most were in Texas.

But it was done for the good of ole Joe six pac.[:@]

underdog · 10-21-2005, 01:02 PM

Please explain how anything in the Energy Bill relates to the current retail price of diesel. I can't see the connection.

bawanajim · 10-21-2005, 02:51 PM

Quote:

ORIGINAL: underdog

Taz, You seem to imply there is some complicity here between Congress and the oil companies on the retail price of fuel when there isn't any shown by anyone anywhere. What laws are the oil companies breaking and what would you have Congress do?

This says it all.

You simply can't see the forest for the trees.

underdog · 10-21-2005, 07:08 PM

How about you explaining it to me, then? How does anything in the Engery Bill relate to the current retail price of diesel?

I'm waiting. Not expecting anything, but waiting.