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Up Topic Welding Industry / General Welding Discussion / Price of diesel fuel lately
- - By NMWELDING (**) Date 12-01-2011 06:25
I went to fuel up a couple days ago and noticed the large price difference between 87 octane gasoline and diesel. Never seen the price spread this much,98 cents difference between the two. Anyone know why diesel has overtaken gasoline in being the higher priced of the two? Diesel used to be always lower in price until about 7 or 8 years ago in our area of Michigan. Can`t understand, it costs less to refine,yet much higher at the pump. This might be common knowledge to many on here,but not to me. Anyone have any reasons to this flip flop in pricing. Thanks.
Parent - By Jaxddad (**) Date 12-01-2011 10:34
The anwser I got was that their is less demand for diesel. But the guy that explained it to me works for ConocoPhillips so, I got the politicaly correct anwser to why we are getting the shaft.
Parent - By weldwade (***) Date 12-01-2011 15:29
My parents and I have a small trucking business. In 2004 we started hauling fuel and just recently sold off our tanker trailers and went back to flatbed over the road hauling. We are based out of Tucson Az. We hauled fuel from West Texas to Cali and as far North as Idaho. I can tell you for a fact that we hauled more diesel than any other product. What people don't see is the amount of diesel that is used in industry; trust me it is staggering to see how much diesel is used in mining operations here in the South West. Our profit margins were in a decline due to many factors in the fuel hauling business. One of the big contributors IMO is the oil companies themselves that drive the rates down to increase their profit. We got to a point where we had to make a change because we would have gone broke otherwise. Diesel is in HIGH demand that is why the price is so hi. Rules and regulations also drive the price higher. I will just get pissed if I even start talking about all the EPA, DOT and federal/state government regulations that are continuing to ruin that business. It cost us close to 10K a year per truck/trailer just to be compliant with all the separate tests. When you have to do the same exact test at a minimum of 1K each for different counties or states is does not take long to be working for free... I have worked too flippin hard for what I have and I am sick and tired of the government raping me and my family for every extra cent we can scrape together. I know I am not different than any other hard working blue collar family out there and I hope you all have had enough too! This BS has to come to a stop
- - By texwelder (***) Date 12-01-2011 12:26
Don't kid yourself there is not less demand for diesel think off just the dodge cummins on the road, then you have ford and Chevrolet. Then all the big trucks and farm equipment, and then in the frac business, some of the  frac pumps use 50 gallons an hour and I've been  on jobs where there were 15 pumps fracing for 8 hrs if you do the math I think there is more demand for diesel so I would say its government tax, when the diesel trucks became more popular is when the price is started and climbing steady
Parent - - By Cumminsguy71 (*****) Date 12-01-2011 13:06
Maybe it's less people with diesels(owners) as compared to gas burners. My comical theory is that they(gas companies) hear so much complaining from the general public about gas prices that their ingenious idea was to decrease the price of the most popular gas(87 octane) and just roll the money they would have made on it over to the diesel price per gallon(least amount of complaints). This way they make the populous happy that the price of gas has gone down while in all reality they just shifted numbers. In this theory this explains the increased gap between 87 octane and Diesel. Some experts will say it is due to the cost of the new(now several years old) 15ppm sulpher or Low Sulpher Diesel. Some other experts will say it is because of the increased demand for diesel from our military across the pond in the sandbox(that have been there for 10 years so I'm not buying that because after 10 years you should know what the demand is, average at least).

Simply put, gas is 3.75 per gallon we'll take 40 cents from it lowering the cost. Diesel could also be lowered due to fluctuations in oil prices but they don't change it, they keep the 40 cents on the diesel price to make up for the ACTUAL drop in price. I know, a crazy outlandish theory, as I said, it's my comical theory, makes me laugh and keeps me somewhat sane.....I said somewhat....
Parent - - By 100inches (*) Date 12-01-2011 16:04
Here in western Canada we are having a shortage of diesel due to a explosion of a plant. At least they could fix it quickly. We had prices go up like nuts and you could only get 75 buks worth of fuel at most places and some stations just didn't have fuel period.
Parent - By JMCInc (**) Date 12-01-2011 18:21
Don't forget the railroad. Not too long ago we built a house by a set of tracks. 10-20 trains a day with three locomotives on the front and two on the back. Each locomotive holds 4000 gallons of fuel. So that is 200,000 to 400,000 gallons of fuel A DAY just in my little corner of the world. Also consider that most of Europe runs on deisel, so we are competing with them for that type of fuel as well.
Parent - By Cactusthewelder (*****) Date 12-03-2011 00:51
I think they are pulling your leg about the prices being because of the Explosion. That 1 plant can not possibly, even remotely come close to supply the demands. Most of the Fuel in Cnada comes throught the Shell import tanks in Montreal and then it is piped to wherever it needs to go
Parent - - By DaveBoyer (*****) Date 12-02-2011 03:34 Edited 12-02-2011 03:36
There is a lot of fuel oil used for space heating & other processes requiring heat. It is not that much different from diesel, just not as tight on the sulpher requirements. They can, and do alter the processing to get more diesel/fuel oil in winter, and more gas in summer.

Before GM offered diesel road cars in the '70s, it was always cheaper than gas, go figure....
Parent - - By 1mancrew (**) Date 12-02-2011 13:09
It my understanding that the increase in the price of diesel is due to the low  sulfur mandate. This adds another step to the refining process thereby increasing the price. We can thank the tofu eating tree huggers for this one.

GH Weidman
Parent - By Cactusthewelder (*****) Date 12-03-2011 00:54
Sulpher content has nothing to do with the price. Look at the SCO on my post below. The price to the distributor is the same either way
Parent - By Cumminsguy71 (*****) Date 12-05-2011 23:03
That cannot be the reason, they used that excuse about 3-4 years ago when they first started forcing the ULSD down our throats when it was first introduced. Seems it came out in 2007-2008 because a friend of mine was asking about additives and things of that nature and I contacted BP to ask questions about the effects of lower sulpher on my fuel system.

The heating thing is as likely an excuse as any, a lot of our troops are on the way home so they can't say it's high demand across the pond causing diesel to soar. I know I paid $3.15 for gas in the welder the other day and $3.85 for diesel. I might be ok if it was openly explained somehow without the smoke being blown up my arse. But with as much smoke as they have been blowing it's like the boy who cried wolf.
Parent - - By Cactusthewelder (*****) Date 12-02-2011 15:47 Edited 12-02-2011 15:51
If you really want to know the behind the scenes info, I will show it to you. I am a Seller Mandate for Refined Product out of Rotterdam. This is where ALL of the prefered products in the WORLD come from. There is VERY little gas or deisel (that WE as End Users purchase) that is refined in the USA. So you are Curious about prices at the pump. I am going to show you an SCO (Soft Corporate Offer) that is released by the refineries each week. This is the price that the Fuel Distributors pay for the Fuel they sell us. While looking at this Document, Keep in mind that the figures are as follows. A Barrel Price is figured on 44 US Gallons per barrel. There are 7.33 Barrles per Metric Ton. So you can do the math. Here is the Most Recent SCO that MY company offer along with the rules of Engagement. This can be a REAL Eye Opener to guys like us.
Attachment: CactusServicesSCO.pdf (529k)
Parent - - By hillbilly delux (***) Date 12-02-2011 21:34 Edited 12-02-2011 21:38
Cactus expain to me what I am looking at? I can't quite follow the information you provided in terms of what it means. Brake it down for me please. I've never seen a SCO before. But interested in the hard facts that I cant seem to pull from this document. It would be much appreciated. (to many abreviations)
Parent - By Cactusthewelder (*****) Date 12-02-2011 21:47 Edited 12-02-2011 21:55
The Column on the far left is the Product. For example  D-2 is what you put in your Truck.  Avation Kerosene is JP-54 Jet Fuel etc... The next two columns are the Quantity availible per Spot meaning a 1 time transaction 50k MT -250k MT.
The MT stands for Metric Tons so, 250k MT means 250,000 metric Tons which has 7.33 barrels per metric ton and 44 US gallons per Barrel.  JP-54 is sold by the Barrel. so it is 44 US gallons per barrel. FOB means you pick it up. CIF means it is delivered.

All of the numbers that are listed in the procedures are just different types of finacial instruments used to pay for the product
Parent - - By Cactusthewelder (*****) Date 12-03-2011 02:46
Heating oil is known on an SCO as MAZUT. The GOST number depends on what you are heating and Country of destination
Parent - - By Cumminsguy71 (*****) Date 12-05-2011 23:23 Edited 12-05-2011 23:32
Looks like the ULSD comes out to about $2.14/gallon, you pick it up.....in Rotterdam! $3.85/gallon around here is a $1.71 difference, figure in shipping costs, transport, additive packages, employee's, and most important, CEO kickbacks and $1.71 sounds about right.

Oddly enough though and back on subject, the "Gasoline All Grades" is only .16 cents cheaper than the diesel which don't explain the .70 cent difference I pay at the pump. As long as my math is correct and I got the info right, 7.33 barrels in a metric ton, 44 gallons per barrel equals 322.52 gallons then $690 divided by 322.52 equals $2.14/gallon and $1.98/gallon on gasoline.
Parent - - By Cactusthewelder (*****) Date 12-05-2011 23:50 Edited 12-05-2011 23:59
Your right. Now Multiply the difference x 250,000MT. Thats what the Oil Companies make per load x about 50 loads a day out of Rotterdam. You also have to figure that the Sellers Mandate (me) and the Buyers Mandate make $5.00 per MT each or $2.00 each per barrel sold. For products sold on a per gallon basis, it is different. I am involved in a deal at this very minute for 70 million gallons per week out of the Houston Shell Refinery. The price is 2.40 per gallon for D-6. The mandates get 1/2 cent each per gallon per week x 52 weeks. NOT A BAD PAYDAY !!
Parent - - By Cumminsguy71 (*****) Date 12-06-2011 00:42
HOLY CR_P!!!
Parent - - By Cactusthewelder (*****) Date 12-06-2011 00:50
322.52 x 1.71= 551.51 x 250,000 = $137,877.300.00 per load profit. The oil companies do this 24 hrs a day, 365 days a year. On some products the profit is even bigger.
Parent - - By Dualie (***) Date 12-07-2011 05:27
I think your also forgetting the slice the gubberment takes out of every gallon of gas/diesel sold at the pump.
Parent - By DaveBoyer (*****) Date 12-07-2011 05:31
I believe that is $.41/gallon [federal tax], unless it went up.
Up Topic Welding Industry / General Welding Discussion / Price of diesel fuel lately

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