Gas vs diesel: calling all conspiracy theorists!
 

Driving by several stations this weekend, I saw gas as low as $2.92/gal, about a 70-80 cent drop in the last couple of months, but the lowest I saw for diesel was still $3.60, only a 10-15 cent drop. How come?

In my area gasoline is $2.69 a gallon verse diesel at $3.47 a gallon???

Theres over a dollar spread between the two here. Its ridiculous.

Deisel trucks (semis), construction equipment, buses, trains, boats, pretty much everything that is meant to move heavy loads or be highly efficient uses diesel.

This means that demand is more steady than gasoline.

But if anything, that should cause the price of diesel to decrease faster than gas, because a drop in price would increase gasoline demand due to all the discretionary users - that is, people who drive more and/or choose to drive less efficient vehicles because gas is temporarily cheap - whereas most of the commercial diesel users will still use the same amount so demand stays much the same.

I bet it has something to do with the latest faked comet landing! :rolleyes:

One of my friends bought a new Mercedes diesel, saying that he saved so much gas compared to his F150 that it covered the car payment and insurance. There are three places in Phoenix, all very far from me, charging $2.539 for gas, but there is one place charging $3.019 for diesel, it is actually one block from where I used to live, but most of the other places listed are $3.299!

Still could be saving money, depending on the particular model of F150 & Mercedes. F150 ranges between 16-23 mpg highway, E-class Mercedes gets 42-45 highway. So he'd still save with 3.30/gal diesel until gas gets down to $1.65/gal.

Diesel went slightly up in price around here last time I checked.

When I investigated this perpetual issue I found that it has to do with a couple things.

1. US Light sweet crude favors gasoline production
1a. Us OIL companies are trying to eliminate the poorly enforced oil export law

2. Oil companies load level profit, they attempt to maintain the price of either diesel or gasoline during a price decrease to maintain profit levels.

See? 1a & 2 = conspiracy!

Nope just empirical repeatable scenarios, there are even graphs of this past behavior online.

Because winter is starting and people like warm houses...

"heating oil" and diesel fuel are essentially the same, so demand is increasing right at the moment, especially with this cold snap.

Additionally, demand for gasoline is typically high in summer (road trips, camping, etc) and trails off in winter. Refineries get roughly a fixed percentage of gasoline and diesel from each barrel of crude, so if the supply of both fuels are linked together. If they process more barrels of crude to get more diesel to meet higher demand, they will have too much supply of gasoline.

I'd bet we see a similar drop in diesel in another month or two as most people get their heating oil tanks filled up and demand falls.

I paid 2.44 a gallon for gas at east coast last week. :thumbup:

I remember diesel being cheaper than gas in the 90s. They (big oil) discovered it was inelastic and people are willing to pay more BECAUSE ITS A DIESEL. :D