diesel price vs. gas

[twodogs]

I have had my Kubota for over 3 years. When I first bought it, I seem to remember that red fuel was cheaper than gas. Am I nuts? I live in western PA, and red fuel is still higher than regular unleaded. I know that fuel prices in general have gone nuts, but does anyone know why this is happening?

 

[mwb]

The way I understand it diesel is a byproduct of making gasoline. As people burn less gas (due to higher prices, smaller cars) the distillers end up with a shortage of diesel and heating oil "byproducts". I think this is why bio is such a big deal, you can make diesel without making gasoline.

 

[Gary Fowler]

I worked for 5 years(2001-2005 on a job in Canada that recovered oil from the abundant tar sands in northern Alberta province. They got all their diesel to run all their mining equipment from the tarsands during processing. Yes they mined it just like coal stripmining. They processed the product after getting all the diesel they needed by hydrogenating the liquid with hydrogen that they made from Natural gas. Total cost to produce a barrel of sweet crude ( sulfur was removed also) was $18 per barrel and they sold it at prevailing market rates to refineries to the south. Diesel was a by product of refining and was easily replaced by adding hydrogen to the crude oil. THe results was a vegetable oil colored liquid that was then refined to produce diesel, gasoline and other products just like good old Pennsylvania Crude.
I said all that to say this, THe price of diesel has nothing to do with cost to produce. It is all related to suppy and demand. Diesel engines turn the world, from farm tractors, to truck to deliver the goods to everyone to heating oil. All run on diesel and it is just the greed of the oil companies that control the price. Even OPEC say the price of crude should be no more than $60 per barrel any thing higher is just excess profits in the oil company pockets.
How many of you are aware of the massive oil reserves found in North/South Dakota and Wyoming. New technology now allows recovery of this and it was reported over 2 years ago but no one has been setting up to get this oil until recently when it was mandated by Congress. It is easier for the oil companies to buy it and charge higher prices than to go after the Trillions of barrels available right here in the good old USA.

 

[RobJ]

Well diesel is a byproduct of refining crude oil. In the tower, different things come out at different levels/tempertures. Gasoline is made from the naptha product near the top of the tower, the naptha goes to another process to make the gas we use. Moving down the tower to the hotter temps, you get jet fuel/kerosene, then diesel (high sulphur), then VGO (vacumm gas oil), then ATB (atmosphere tower bottoms). The VGO and ATB's can go to another process to make more of the above. Eventually you get stuff used in asphault.

So high sulphur diesel comes out of the process without doing much to it. BUT...these days the fed says the sulphur needs to be much much lower in diesel for EPA reasons. So diesel is sent to a hydrotreater. This process uses hydrogen to pull out the sulphur. Yep there is a big pile of sulphur lying around after.

So all this extra process cost money. But I'm sure with the way things are going up...it's not the only reason.

Plenty of better and perhaps more accurate web pages to read if you google it.

Rob

 

[Gary Fowler]

Extra low sulfur fuel was mandated in California years before the rest of the country required it. I worked on an ARCO refinery building the sulfur recovery plant to reduce the sulfur to the mandated California standared almost 10 years ago. It didnt raise the price of gasoline or diesel at all at the time. I have worked in upgrader projects in refineries for many years. The oil companies dont generally upgrade to better technology till forced to. Even if the upgrading would reduce their production cost, they many times wont do it. WHY? Because regardless of the cost, they can pass the final cost on to the consumer, after all how many of us have an oil well AND a refinery in their back yard.

 

[MikeD74T]

One more aspect to passing the cost to customers. There's lots of alternatives for people to reduce their gasoline usage. One way to keep profit up is to keep diesel prices up. Every product purchased in any store in the US was moved at least once by diesel fuel, either truck or train, or both. Truckers can pass the price along, consumers just pay.
When diesel was $1.85, only a couple years ago, I heard truckers say when it passes $2 my truck is getting parked. Now most would be happy with $4 diesel but they're still trucking. MikeD74T

 

[Todd_C]

Diesel and gas are running roughly the same in my area. I've seen diesel for $3.79 per gallon and the most I have seen it was $4.49 per gallon. I've been buying ULSD for $3.99 and gas is the same price at the station. I hope gas stays about the same as diesel, so I can feel better about my new diesel pickup. I'm getting 20-21 mpg out of my 3/4 ton truck, so I feel a little better about diesel prices compared to gas trucks.

 

[ihookem]

I see of road for almost the same price as on road. It doesn't sell as fast but it is surely gouging. Without tax the off road should be .57 cheaper but is rarely more than .50 cheaper and have seen it only .05 cheaper than on road. I am also sure the oil companies keep the crowds quiet by saying they only make.08 on a gallon of gas but never talk about diesel profits. They are soaking the self employed guys that own a buisness knowing they will pass the cost, and gas consumers never know it when they buy something. Diesel is worth it though. I drove a 500 mi. hwy trip empty at 58 mph. and got 22.2 mpg. Add 3% because of my over size tires and real mileage is 22.8.mpg with my 3/4 ton 05 GMC diesel.

 

[RobJ]

Diesel is worth it though. I drove a 500 mi. hwy trip empty at 58 mph. and got 22.2 mpg. Add 3% because of my over size tires and real mileage is 22.8.mpg with my 3/4 ton 05 GMC diesel.

Yeah but who likes to drive 58 on the freeway!

BTW, you can probably reset the computer on your GMC like my Ford. With a Ford the setting is in tire revolutions per mile. I took the programming instructions from the web to the dealer because the service writer thought I was crazy. Cost about $50 and 10 minutes. Here is an old link to help you calculate the rpm..

Rob

Tire size calculator

The tire sites usually have this calculation to...

BFGoodrich Tires All Terrain T/A KO

 

[Dargo]

Oh man, I was just at a GM dealership yesterday and all the service techs were gathered around telling this story. It seems that a guy bought a brand new Duramax diesel powered pickup a few months ago from the dealership and, as I hear it, was bragging about how he got his fuel basically free. He was going around to all the McDonalds and other places and getting their used cooking oil. He had his filtering contraption in his garage and supposedly had something like a 500 gallon plastic tank of fuel all made up and was able to make more than he could use.

Well, as the story was told, it appears as if his homemade fuel didn't work so well in his new pickup. I don't know what all it screwed up, but I did hear mention of the injection system, engine parts and particulate filter being all screwed up. Also, I was told that with the particulate filter almost completely plugged he created too much back pressure which screwed up his turbo and overheated the engine. From what I gathered it sounded like he really fried his truck (pun intended). The big ordeal was how the guy went ballistic when he was told that he'd voided his warranty and GM wasn't going to cover the repair that was some ridiculous price like $15k or $20k.

I'd never really considered making my own fuel before. Now I'm sure I never will. I'll just bend over and take it at the pump and pay whatever it takes to fuel my diesel vehicles and keep buying my off road diesel from my same distributor for my tractors and mowers. I'd hate to make such an expensive mistake as that guy did trying to save a few bucks on fuel! Besides, I once bought one of those 'brew your own beer' kits and I clearly failed at producing anything that was drinkable. All I got from that was a belly ache and wasted a few hours of my time and about a hundred bucks. That upset me so much that I couldn't imagine ruining $15,000 to $20,000 of equipment by trying to be cheap!