diesel/gas costs

[papab]

I realize this isn't an engineering question, but more engineering economy, but I'm sure someone here will have some wisdom. Diesel fuel costs about 25% more than regular gas right now. Is this here to stay because of the requirement for low sulfer now? If it isn't that, is there something in the supply/demand chain that has shifted?

 

[BigInch]

You must include the taxes. If they reduce the tax, diesel could be cheaper than gasoline again.

I hate Windowz 8!!!!

 

[papab]

Nope, taxes only make up 10 cents out of of the 50-75 cent per gal difference.
Us: gas:49.5 diesel 54.8
CO gas 40.4 diesel 44.9

 

[BigInch]

OK fine, then it must be gasoline demand is relatively lower against supply.
Surely they not giving us a Christmas present.
Gasoline price elasticity,

http://www.nber.org/papers/w12530.pdf?new_window=1

I hate Windowz 8!!!!

 

[hokie66]

In Australia, the tax on gasoline and diesel is the same. The price at the pump for diesel is about $1.59 per litre. For gasoline (petrol) it varies, $1.40 to $1.55. I think the price is just what the market will bear. When I bought my current car, a diesel, diesel was cheaper than petrol.

 

[miningman]

In Western Canada, about three years ago, when the price of diesel seemed to rise above that of gasoline every fall , only to fall back again , the oft quoted reason / excuse was all the temporary demand from the farmers bringing in the crop. Today the diesel price seems to be above that of gasoline 12 months a year , so it seems to be here for good..........as it has been in the UK for years

 

[JJPellin]

I believe it is simple supply and demand. Our refinery is currently selling gasoline at break even price. The vast majority of our profit is driven by diesel. A few years ago we built a Hydrocracker which allows us to make ULSD in greater quantities and at lower cost than our primary competitors. Without that unit, we would probably be selling much less diesel.

Johnny Pellin