Diesel Fuel

[Neal]

Folks, costs do not determine price. If I can manufacture something for $1 and people will pay $200 for it, should I not sell it for $200?

Why do they come down then? Why did gas fall to wonderfully low prices "last term" when they didn't have to? If a gas company or gas station can charge $5/gal yet they are at $1.98/gal, why would they ever do that? Competition I s'pose, the one down the street moves theirs down as they know the profit margin, and it's a battle back and forth driving the prices down. It's one thing what someone will pay for, I guess the flipside is the competition allowing you to find it cheaper somewhere else causing the spiral of pricing.

 

[B52Bombardier1]

This is all basic college Economics 101. The Supply & Demand curves. We have a supply problem . . . . which will drive down demand until supply increases and an equilibrium is reached.

I see no industrial conspiracy here. We can all lament the cost of items but it is what it is and would be worse without free markets.

Rick

 

[Rex Franklin]

Folks, costs do not determine price. If I can manufacture something for $1 and people will pay $200 for it, should I not sell it for $200?

Yes, I believe that’s called free market economy. Problem is, people don’t have a choice, you have to buy it. We have to move goods, and we have to go to work. In todays society, you have to have a vehicle.
My original point is/was they took a by-product of making gasoline; realized they could gouge the US and make billions EXTRA profit by targeting the big trucking industry with inflated prices. This in turn drives up the cost of EVERYTHING in the United States. Just because you can, does not make it morally right !

 

[Rex Franklin]

This is all basic college Economics 101. The Supply & Demand curves. We have a supply problem . . . . which will drive down demand until supply increases and an equilibrium is reached.

I see no industrial conspiracy here. We can all lament the cost of items but it is what it is and would be worse without free markets.

Rick

It is not a free market, when the oil companies, collude to price fix and set the inflated price !
Read first post about costs and prices at each station !

 

[B52Bombardier1]

It is a free market when one oil company can lower its selling price, then sell more product and maximize profits than the other oil companies.

The urge to make higher profits is certainly strong and can be a double edged sword but things would certainly be worse without free markets. If markets get controlled by rule-making, producers will simply stop producing because they lose money . . . remember 1974???

Rick

 

[Neal]

Two threads, same topic. Let's use this one:

Diesel Prices Are Going Up Really Fast

We finally rough sketched our 2022 travel plans. We will be heading out of Florida in a couple of weeks. Yesterday we had to drive the F350 down to Ft. Myers (170 miles round trip). I noticed that diesel prices were about .15 higher down there so as we drove back I kept watching stations...

rvforums.com

 

[Neemer]

Just because you can, does not make it morally right !

That notion consumes an entire semester in business school.

 

[Rex Franklin]

It is a free market when one oil company can lower its selling price, then sell more product and maximize profits than the other oil companies.

The urge to make higher profits is certainly strong and can be a double edged sword but things would certainly be worse without free markets. If markets get controlled by rule-making, producers will simply stop producing because they lose money . . . remember 1974???

Rick

I remember 1974 very well !! Long gas lines ! What a pain that was !
Free market is the best system in the world. Promotes competition, which is good for the consumer.
However, when you have price fixing, free market does not mean anything ! I have owned several successful businesses in my lifetime, as partnerships, and as owner, and know how it all works.
You can not tell he that price fixing us not going on ! Refer to my first post.
Every oil company can not possibly have all the exact same costs to end up with the price of gas and diesel within 1 or 2 cents of each other.
Come on really.
If you believe that, I have this nice bridge in Brooklyn I want to sell you. You can make a toll road out of it and make a fortune .
Price fixing, plan and simple.

 

[Fish]

I think we are just being ripped off , because they can and nothing will happen. We have to go to work and move goods across the US. Let’s face it, when you report your last years profits at $ 35 Billion !!!!! Does that not seem to someone that they are over charging people for gas and diesel ??? It’s the diesel that gets me. A by-product of making gas, yet it costs $ 1.00 more a gallon ! Additives my butt, they don’t cost that much !! Greed will get them one day ! Electric, solar, wind, the next thing , will put them out of business .
Maybe one day, they will have cars and trucks with solar panels in the roof, batteries in the floor and very little need to charge the batteries. The top of every tractor trailer rug could have some new super solar panel to keep the batteries charged and take it across the US. Plug your tractor into the trailer and keep your batteries charged up even more than the panels in your tractor . Tired of this high fuel price and something needs to be done !

I don't view diesel as a byproduct of making gas anymore than I view gas as a byproduct of making diesel.

A few years after I retired my union was having a hard time manning the refinery. They offered me a deal that if I would go up there to work I could still draw my pension at the same time. Since my job was in the heated and air conditioned sheetmetal shop making patterns for and then the aluminum covers for all the different insulated pipe fittings, tanks and such I didn't have to go out into the unit so I stuck around for a few years.

Since I'm curious I asked a lot of questions, one being why is diesel higher than gas? I was told by some old timers there that around 2010 the government enacted the sulfur standards on diesel and removing the sulfur was an expensive process.

 

[FL-JOE]

Rich is right, the feds requiring lower sulfur diesel (less pollution) plus .06 higher fed taxes on diesel (compared to fed gasoline taxes) led us to diesel staying higher than gasoline. This will never change.