get ready for very expensive diesel

[Z-Michigan]

t seems to me if profit (price) is controlled...the demand would remain about the same. Supplies would be loosened up since there is less profit. Does that make sense or is it flawed? How did Nixon's controls fail? Why didn't it work?

Controlling price would likely increase demand because people would no longer worry about prices increasing. Best case scenario, demand would be unchanged.

Supplies would become erratic because suppliers would only produce and sell when they could make money while selling at the fixed price. If their raw materials fluctuate in price, they will stop production when raw material prices are up, and only produce when material prices are within whatever becomes affordable so they can still make a profit. So supplies will be erratic and shortages will be common. Sounds like gas lines in the 70's huh? (I was born in the 70's so I don't have personal memory of gas lines.)

 

[lambs]

Current issue of Car and Driver has an interesting column on diesel prices in the US. Seems there are two different refining methods generally in use. In the US, the method in use produces significantly more gas than diesel. In Europe, the other method is used, and it produces about as much gas as diesel. We aren't building new refineries, and we can only get so much diesel out of the ones we have, so as demand for diesel rises, so does the price.

The column went on to state that we are currently importing diesel from Europe to keep up with demand. I think it was in the 10-12% range. No wonder prices are going up.

 

[Roto]

i read the articles and still dont know why a cheaper to make diesal is 62 cents a gallon more then gas. Is there a short answer anyone? less then 20 words?
mike

 

[MikePA]

Is there a short answer anyone? less then 20 words?
mike

Supply and demand.

 

[Ductape]

Greed. Most goods move by truck and train in this country. We use a massive amount of diesel, so the oil companies charge as much as they possibly can, but keep the price just below collapsing the economy (which i predict is coming soon).

 

[MikePA]

they don't teach economics in school so far too many people fall prey to panderers looking to exploit people's emotions.

Greed...so the oil companies charge as much as they possibly can, but keep the price just below collapsing the economy (which i predict is coming soon).

QED..

 

[Ductape]

Supply and demand.

Supply and demand in a fixed market where there can be no new competition.

 

[Roto]

OK so its a no brainer then since its cheaper to make diesal just make more diesal to make up for the short supply and make less gas to equal out the price. If they choose not to then its a greed $$$$ issue.

mike

 

[Redbug]

Some interesting reading, and good viewpoints...angles to ponder...

 

[MikePA]

OK so its a no brainer then since its cheaper to make diesal just make more diesal to make up for the short supply and make less gas to equal out the price. If they choose not to then its a greed $$$$ issue.

I helps when facts are ignored;

• Refineries are running almost flat out all the time they can't just 'make more diesal' without stopping making other fuels.
• Refineries have to switch to making heating oil in the fall/winter.
• Home heating oil = diesel fuel

Much simpler to pander to people's emotions. Of course, for people who respond to such pandering, facts are irrelevant.