Diesel Prices: All Over the Map, Why?
We all know that the price of crude has dropped big-time lately. From a high of nearly $150 a barrel earlier this summer it now stands at less than half that, around $66 a barrel.
Great, so prices at the pump have dropped too. Regular gas is down to around $2.96 a gallon here in everything-is-overpriced L.A. and diesel is priced, umm even lower...or drastically higher as I discovered at two Shell stations located relatively close to each other...
The "are you kidding?" price seen here is located in Culver City, the bargain price in Hawthorne. I also noted that in various Santa Monica stations the rip-off is also in full effect, with diesel going for around $3.75 to $3.99.
This makes absolutely no sense. To summarize this craziness, I present the following facts:
1) These are the same brand / supplier -- Shell.
2) Their gas prices had a relatively modest disparity ranging from 5 to 14 cents while their diesel prices differed by a massive $1.10! To put that in perspective, you'd be paying 38 percent more for each gallon if you fueled up your diesel at the "take-em-to-the-cleaners" station.
3) These Shell stations are both in greater L.A. cities about 10 miles apart from each other.
In recent times, diesel has been the most expensive fuel, in contrast to a long history where this less-refined fuel was always cheaper than gasoline. So it's great to see that it has once again become less expensive...provided you go where they're not gouging.
I recommend using gasbuddy.com to find the lowest gas and diesel prices in your area.
So can anybody out there shed some light on this crazy, illogical disparity that I've witnessed?
John DiPietro, Automotive Editor
- Posted by
- John DiPietro October 30, 2008, 3:00 PM
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- FAQ Friday, Fuel Economy, Life with Cars
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- Diesel, Fuel Prices
Culver City = westside residential diesel car owners usually affluent
Hawthorne = more commercial use
reason=price gouging sob's
Diesel prices have descended to the point of being equal to regular here in San Luis Obispo. Just a few weeks before they cost the same as premium.
$2.959 at the shell for regular btw. I honestly never thought I'd see a 2 in front of a gas price again, at least not in non-central-valley California.
Don't kill me, but I just about fell out of my (car) seat when I saw gas for $2.09 this morning. Diesel was $3.59 however.
For the last few weeks, I've seen diesel about 50% higher than regular gas. That's crazy. Everyone is happy because gas is down. What they fail to realize is that with diesel still being high, there continues to be a large impact on our economy.
I'm going to toss the conspiracy theory out there too....diesel prices are made high to kill any potential growth of the diesel personal automobile.
There you go, I said it. I can't back it up, but the price variations just seem too suspicious NOT to theorize.
What are the truck-oriented interstate filling stations charging for diesel these days?
Doug, I've been suggesting conspiracy theory ever since diesel rose above gas to begin with. Both to deter the migration to diesel cars and to impact our economy by going after commercial transportation.
At one point, they claimed it was a supply/demand issue. They suggested that the number of diesel cars had increased so dramatically that diesel was in short supply. Yea, right. At the time, you could even buy a new diesel car.
Is the new low-sulfur diesel more expensive to produce? That could help explain why it's now more expensive than gasoline than it was in the past. But it doesn't explain the difference between Culver City and Hawthorne.
Brn and Doug, I agree with y'all on the conspiracy theory: I think the oil companies are raising the prices of diesel deliberately.
But, why? I would have thought oil companies stand to profit as much from diesel as from gas?
EPA estimated that ULSD would cost 4-5 cents more per gallon. That is including any new equipment needed by refineries. My guess it's even less.
Here is a good explaination I found
"As a retired ChEngr who worked for Texaco let me say this:
The cost for refiners is less for diesel because it is one of the first cuts off the first distillation tower. Then if needed desulfur it and throw in minor amounts of additives and it's ready to sell. That's it, very simple and cheap.
For gasoline it's a whole different story. Refiners take cuts of the first distillation tower and then (to keep it very simple) use even more towers/reactors/treate... (hydrotreaters/FCCU fluid catylitic crackers/etc.) to make what we call gasoline. And then they throw in lots of additives, and finally it's ready to sell.
Now tell me again why we get to pay more for diesel when it's a lot cheaper to produce from the same barrel of crude?
And tell me why in many foreign countries diesel is cheaper at their pumps than gasoline which reflects the true cost of production?
Answer:
In the USA they simply charge more for diesel because they can and get away with it"
JDP, here's a column piece by Steven Cole Smith readers may enjoy.
Smoke and Mirrors: Why Are U.S. Diesel Prices So High?
http://www.edmunds.com/insideline/do/Columns/articleId=108465/subsubtypeId=218
So, Suby and cruiserhead, that brings us back to this question: is diesel somehow less profitable than gasoline? If not, why would they not charge more reasonable prices so that more people would buy diesel cars and the oil companies would eventually gain more revenue/profits?