Diesel fuel


#1

why do diesel fuel cost more than gas. I remember as a kid diesel cost less. when I was a kid diesel was 8 cent a gallon.


#2

Because of the new extra steps to refine it to ‘‘ultra low sulfer’’ specs.


#3

Before ULSD the price levels for diesel and 87 octane used to regularly trade places but late in every year diesel would become higher when the heating season began. Since ULSD began, diesel has been consistently more expensive with the exception of this past summer when for a few weeks where I live, diesel was cheaper. There is an additional 6 cent per gallon federal tax on diesel to help cover road damage from trucks. There is plenty of demand for diesel fuel for trains, trucks, farm equipment, construction equipment, home heating and a similar fuel, jet fuel for airplanes.


#4

Supply and demand. This is the reason anything costs what it does, just ask an economist.


#5

It does have more energy than gas (about 10%), so it makes some sense it should cost a bit more…


#6

It’s mostly a matter of supply and demand, and demand now is very high worldwide. In Italy 30% of all new car sales are diesels, as in France and nearly that much in Germany. Fuel markets are global, and the US imports a substantial amount of diesel made from much more expensive crude oil.

The increased processing costs to get low sulfur adds a little.

The fraction of the crude oil barrel that’s in the middle of the barrel can be made into kerosene, jet fuel, or diesel.


#7

Docnick, you sure about that imported diesel bit?
My understanding is that at this point, we are exporting significant amounts of refined product, primarily diesel.


#8

@Tony Carlos In the Midle East there are dedicated “export refineries” which take crude and refine it for shipping out of the country. Saudi Arabia and a number of other countries do this to add value. There is a brisk international trade in diesel; the 2 very large refineries in Rotterdam, Netherlands export nearly all their product; to the rest of Europe and overseas.

The US balances its needs from domestic and imports.

A refinery in Newfoundland, Canada processes oil from the Hibernia offshore field, and the products are mostly exported by sea, since Newfoundlands only has 500,000 inhabitants.

Don’t ask me for a detailed trade balance in diesel, bit it is very complex. Clean diesel fuel production started earlier in Europe than in the US. Imported European diesels need this very clean fuel.

At this stage the US exports diesel from the Gulf ports and imports it into New England and other NE states.


#9

I agree with @kengreen as the primary reason for the increase in price. This is just my personal opinion. Diesel oil is a higher desity fuel which is primarily responsible for the better gas mileage. That’s a double edge sword because America, different from Europe, depends more on long haul trucking as a primary use for diesel instead of personal vehicles. Where for years the trucks were exempt from the same polution controls as cars, it was cheaper then. Start to bring more diesels onto our shores for personal transportation, it then needs to be cleaner and it competes with the trucking industry. Therefore, the price increases. IMHO, hybrid technology is a better answer as gasoline is more plentiful. We are selling the darn surplus overseas ! Toyota which is a big diesel maker world wide could easily make diesel cars and trucks for the US. But, the long term out look for the price of diesel vs gasoline isn’t good. Most US makers feel the same way and will only dabble in it reluctantly for heavy duty use where the efficiency of operation is more important then the actual cost per gallon.
Now I’ll sit back and read the real reasons.


#10
  1. One reason is that we can get more gasoline from our crude oil. Chemical cracking helps.

Another reason actually does have to do with the diesel quality.

Reason #C: More cars use diesel; which, combined with the other reasons means that we have to refine our crude with that in mind. In the old days we had enough diesel fuel just from using the waste part of the refining process. Somewhere in between bunker fuel and gasoline was good enough in the old days. Times changed and situations changed too.

#19. From the list of excuses: I have given it some thought but I’m sure that I will never know the true list of reasons. Jesse Ventura may wish to investigate further.


#11

@dagosa The heat content of the fuel is not the reason for its high price. Bunker C has even higher heat content, and it’s really cheap. Similarly, high octane gas has the same heat content as regular gas, but sells for a lot more.

The processing costs as well as the “supply and demand” situation determines the price.

My wife was shopping for a swimsuit the other day. It seems the less material, the higher the price.

Another emerging need for better heavy fuels is the more stringent requirements for ships and trains. The old bunker C may be relegated to boiler fuel or paving material and the middle distillate demand will further increase. Refineries can, within reason, change their yield somewhat, but that cannot compensate for drastic market changes. When American cars were gas guzzlers, the large amount of gasoline produced gave us cheap diesel.

As I mentioned before, the market forces are complex and there never is one simple reason why somehting costs more than something else.


#12

The United States is still importing about 48 % of its oil products. The percentage has dropped for two reasons, better fuel mileage for our cars, and we are driving less because of lower wages and loss of jobs.


#13

@docnick "the heat content is not the reason for its high price"
I don’t think I said it was, directly. Because it does have more energy per gallon, it makes a better long haul trucking fuel. It’s the competition, I feel with a primary use for diesel fuel in the US. I don’t believe we make a surplus of diesel as we do gasoline. Having higher energy content makes it better suited for HD use. I was spelling out where the demand comes from; for use in long haul ( as bunker oils do for shipping) (and our military, the biggest single user of fuel oil in general in the world) is much greater because of the fuel quality, higher energy content, and it’s practicality with safety in use.

Try using gasoline as a fuel for long haul and heavy equipment and in the military and the price of gasoline would soar too. Thankfully, it’s a very impractical fuel for many reasons.

I am in strong opposition for diesel fueled cars and trucks becoming common place for anything but HD use here in America, as it mostly is now. I feel it’s a step backwards for we in the USA.


#14

The third reason (probably the first) for the drop in imports is the explosion in domestic oil production.


#15

Diesel - for some reason is in a state of flux more then gas. When gas prices fluctuate…Diesel costs more then premium. But when gas prices are stable…then Diesel is about the same as mid-grade gas. It use to be cheaper then regular.

Probably to do with the new ultra low sulfur regulations.

As for supply and demand…Diesel is the same formula as heating oil. So it’s always in demand.


#16

There’s not much point in having a diesel engine in small cars and trucks in the US nowadays

Gasoline direct injection, hybrids, electric cars, etc. are so fuel efficient, that they are making diesel powered small vehicles kind of pointless . . . in the US, at least

Diesel powered vehicles cost thousands more upfront versus the same vehicle with a gas engine. Most people don’t drive enough to break even


#17

Diesel powered cars and trucks need govt. intervention to make it profitable to buy the more expensive vehicles to use cheaper diesel fuel then it is now. That only happens by tax relief for diesel fuel. I hope it never comes.The military is experimenting with fuel cells which makes more efficient use of fuel by producing electricity directly without combustion and indirectly by the production of hydrogen where practical. It does work but now the cell life is not long enough to compete with the internal combustion motor. If it can reach 150k to 200k miles, we can fuel up then silently move along on electric motors. The military is very close to powering boats and heavy equipment that way. Of course, they have our unlimited tax monies to keep replacing cells but it does hold promise for multifuel use in tomorrow’s cars…someday. I’m not holding my breath…too old.


#18

@dagosa Indeed, in Italy diesel is 30% cheaper than gasoline because the government juggles the tax structure. What the refineries charge is really irrelevant. In Europe motor fuel cost is over half taxes, so this juggling is easy. It originated with the first oil crisis which made many governments put programs in place to reduce overall oil imports. Commercial operators had a complex system of tax refunds to keep transportation of goods cheap.

These programs make no sense in oil PRODUCING countries such as the Middle East, Canada and the US.

I agree that the new direect injection gas engines with high compression ratios are close to diesels in overall efficieny wihto the troublesome exhaust scrubbing systems.


#19

@Docnick
"I agree that the new direect injection gas engines with high compression ratios are close to diesels in overall efficieny…"

I am anxious to see them hit the marker in greater numbers. I know it will be a big item with Toyota at some point as even though they make lots of diesel powered vehicles world wide, they are very reluctant to do so here. If car companies were people, Toyota would be your old maid aunt who never married and worked at the same bank as a teller for 55 years, squirreling away money her entire life and finally leaving to her cat. They make sudden moves only when the world moves off it’s axis. Then, like their sports car, the have some one else like Subaru take the retooling chance. Yawn.


#20

“Yawn” is . . . unfortunately . . . a good way to describe Toyota vehicles

I should know, because I’ve owned several over the years