Why diesel fuel cost more than gas

[byamcaravanner]

Originally Posted by Journalist

If the price of oil is driving the increase is gas prices, then explain why so called "big oil" is making record profits. If the increase was based solely on the increase in the price of oil, shouldn't their profit margin remain roughly consistent?

Their margin is consistant... but 10% of $100 is two times as much as 10% of $50... plus the average cost to extract a barrel of oil remains the same no matter what the price. The profits aren't always rosey... it was not long ago that a number of the big oil companies were bankrupt (Texaco, etc...).

The fact is that there is MUCH more competition for the oil supply these days than in the past. Twenty years ago they were riding bicycles in China... today The International Olympic Committee is concerned about the heavy smog at the Bejing Games.

[Beginner]

Reason #1
Greed
Reason #2
Our entire "Government" no longer watches out for the lowly citizen, just the special interest group that feeds their Re-election money chests.
Reason #3
De-regulation
With no controls the oil companies run wild. Am I the only one who notices that their profits have soared astronomically in the past years?
Am I the only one with a memory?
Beginner

[pmclemore]

Profits as a percentage of oil company revenues, or investment, have not gone up. Demand in relation to supply has.

Plus, look what the dollar has done with respect to other currencies. Or gold. Oil prices if measured in gold (another commodity) are flat. Also, oil prices in euros have gone up far less than it has in dollars.

But believing in conspiracies is much more satisfying. And don't we think those Canadians have some nerve charging so much for their loonies. It was so much better when we could go up there and get 1.50can for each dollar. Boy.

Pat

[Beginner]

The Six thirty news (NBC National news, CNN, ABC, CBS) always refers to "posted Profits" not revenues.
Beginner

[myoung]

Originally Posted by Beginner

Reason #3
De-regulation
With no controls the oil companies run wild. Am I the only one who notices that their profits have soared astronomically in the past years?
Am I the only one with a memory?
Beginner

Beginner,

Might you think differently if the government decides to regulate the company for which you toil? As Peter Drucker once observed: "Profit is the cost of remaining in business for another year."

[Happycampers]

Pat... In relation to our Loonie compared to the US dollar, we have been paying for years on an increased US dollar it is time for us be at par for a change..

[maxandgeorgia]

All I can say is "ouch!" For whatever reasons, our local diesel fuel just jumped to 3.519 from a more recent low of 3.15. (What a laugh to term that a "low." And I need to refill-ARGHHHHH! ~G

[Minnie's Mate]

Middle Eastern countries deal internationally in U.S. Dollars for crude oil, not gold. A deflated dollar only benefits the European, Pacific, Canada, South American, and Asia countries. It is detrimental to the Middle Eastern and Caribbean and other nations that tie the value of their currencies to the U.S. dollar.

[Happycampers]

Hello.... We are paying $1.08 or more a litre for regular gas and Diesel is more expensive than that... glad we filled our truck and auxiliary tank and added stabilizer to it...

[safari 28]

Hey diesel guys on the edge, just averaged 13700 miles with 28 in tow and the number, 2.97 / gallon. Today filled up in Ft Collins with e85. 2.49/ gallon. Look at the overall reasons to own a diesel and shop the new generation of gas 1/2 tons and the reason to change will be very clear indeed. It seems always diesel is at least .25 to .50c more across the country.

[Wabbiteer]

Diesel eliminates the ethanol - toluene - acetone dilutants the petrochemical companies feel the need to add to their product to reinforce their bottom lines to get rid of excess inventories, etc.

Minnesota gas is 10% ethanol, soon to be 15% (20%?) and we get a huge mileage LOSS because of it. Sure on paper it reduces the cost to fill up the tank but hunting the next station comes much sooner. The only plus to Ethanol here is IF they ever turn off the importation of 'Petro' for any reason, MN will still have some fuel for emergency services etc. It would be a truly scary day when Canada can't sell us oil!!

On local gas I am lucky to get mid-14's mileage on an empty F-150 cruising southbound on the Interstate. With Missouri non-alcohol blended gas 18mpg is common on trip home, I've seen 20mpg with a strong tailwind.

If we add back in that 16% mileage penalty our $2.92 regular becomes $3.28; I just found a station selling 'classic car or recreational use only' pure petroleum hightest for $3.38 a gallon (beats Marina gas prices by 40-cents!) and I've used that in snow-throwers, mowers, blowers, etc just to extend run times!

I am looking forward to the next-gen diesel engines!

[pmclemore]

Originally Posted by Beginner

The Six thirty news (NBC National news, CNN, ABC, CBS) always refers to "posted Profits" not revenues.
Beginner

Yes - the news outlets display total ignorance about the relationship between revenues and profits. "Record Profits" out of context is much more newsworthy to that kind of reporting.

Pat

[pmclemore]

Originally Posted by Happycampers

Pat... In relation to our Loonie compared to the US dollar, we have been paying for years on an increased US dollar it is time for us be at par for a change..

I agree that our northern friends have been at a disadvantage for a long time. While it is good for Canadians that we are managing our currency worse than they are, we are both falling behind in terms of the euro.

In the mean time, it is a great opportunity for our Canadian friends to come South and enjoy the strength of the loonie down here. And I'm always glad to meet them.

Pat

[pmclemore]

Originally Posted by Minnie's Mate

Middle Eastern countries deal internationally in U.S. Dollars for crude oil, not gold. A deflated dollar only benefits the European, Pacific, Canada, South American, and Asia countries. It is detrimental to the Middle Eastern and Caribbean and other nations that tie the value of their currencies to the U.S. dollar.

Well, sort of. The reason they are charging so much more for the barrel in dollars is that the dollar has fallen so much. Suppose you owned oil and the value of the currency declined - wouldn't you require more of that currency before you'd accept the deal? That was my point...if our currency had remained stable as a store of value, the number of dollars required would not have increased so much. So combine an inflated dollar and skyrocketing demand and the results are as predictable as gravity and sunrise.

Pat

[Beginner]

Countries of power, like we used to be, produce/manufacture goods.
A large majority of our manufacturing (jobs) has left for overseas.
Workers have lost their jobs and cannot find work/are not paying taxes.
Large multitudes of peoples are on the public dole, have been for generations and have no intention of getting off the dole.
A very large number of us are baby boomers and are getting ready to retire/make far less money than while working.
A point is comming soon where there will not be enough people working to keep the "dole" pot funded.
(I'm gonna get in trouble for this one)
Then the politicians in Washington will have to figure out a different way to buy votes for the next election, (one party more so than the other)like canceling NAFTA, abondaning the free route between Mexico and Canada (which will only be a drug delivery corridor) and enticing manufacturing back into this country.
Beginner

[NevadaGeo]

Actually, the oil business is not that profitable compared to many other industries. Its just that the "Big Oil" sells many more times gallons at 7 or 8 percent "profit" than your company does that makes 20% profit. Would your accountant be thrilled if your company was making 7 or 8% profit?
Just a thought: Go out and produce your own oil. You can do it, lots of land out there available that's not locked up from drilling. Nobody is preventing you from doing it. Just small details, like price of the drilling rig. Drilling dry holes about 20 times until you come up with your special dowsing rod that says "drill here" for oil. Cost of leasing the land from the land owner. Giving the land owner 1/8th of whatever comes out of the ground. Then giving another 7 or 8% "advaloreum" tax to the state. Then paying "your fair share" to the fed.
Go to eastern Kansas, or maybe Ohio, where wells are relatively shallow and you can drill a small stripper well for less than the deeper wells in Texas. There are a lot of small privately owned oil companies in the US needing investors to share in the cost of drilling, go do it instead of being the victim. Buy a 1/16 or 1/8 working interest in some wells and be an big bad "oilman".

[DFord79]

Originally Posted by Beginner

Countries of power, like we used to be, produce/manufacture goods.
A large majority of our manufacturing (jobs) has left for overseas.
Workers have lost their jobs and cannot find work/are not paying taxes.
Large multitudes of peoples are on the public dole, have been for generations and have no intention of getting off the dole.
A very large number of us are baby boomers and are getting ready to retire/make far less money than while working.
A point is comming soon where there will not be enough people working to keep the "dole" pot funded.
(I'm gonna get in trouble for this one)
Then the politicians in Washington will have to figure out a different way to buy votes for the next election, (one party more so than the other)like canceling NAFTA, abondaning the free route between Mexico and Canada (which will only be a drug delivery corridor) and enticing manufacturing back into this country.
Beginner

I agree whole hartedly with "countries of power manufacture/produce goods". That statement was a principle in capitolization and economics taught in ever college in the country a few decades ago. What was also taught is the fact..based on history...when a country is NO LONGER a major manufacturing/producer of goods it becomes a service industry based economy. HISTORY says....along with some very famous enconomists of the past...if you're economy is based on the service industry you are soon to be a THIRD WORLD COUNTRY. Our corporate leaders have sold us down the road for fast board room profits to a small percentage of the population. All the while making it seem warm and fuzzy saying We are giving jobs to the rest of the world so they can buy our products. We can't be the
money launderers for the rest of the world and survive forever. When that happens 20 pecent of the population will be rich and the rest will be in poverty.....does third world country mean anything to anyone YET?????

[Happycampers]

Hello Pat.... We love to go south for the winter but we are staying here because Costalotta was not ready for us . My hubby Marvin is from West Virginia... my second home ... I love it there... Hope to meet you sometime...Annie

[DFord79]

Sorry,,,didn't mean to hijack the thread. I wanted to say...did you know gas prices are controlled by wall street futures and has little to do with supply and demand. I just heard that on a radio talk show. It came from a long time senator from somewhere on the EAST coast.

[byamcaravanner]

Originally Posted by DFord79

...did you know gas prices are controlled by wall street futures and has little to do with supply and demand.

Wall street is "Suppy and Demand headquarters"