Diesel Prices Hit Parity With Gasoline
The latest statistics from the Energy Information Administration show that diesel is actually .03 cents per gallon cheaper than gasoline on a national average. Whereas gas prices have risen considerably since their December low, the drop in diesel prices was slower, making the bounceback less extreme. According to CNN, the price parity can be traced to inventory levels. Gasoline inventory has been dropping bringing prices up more sharply. Meanwhile, diesel-making distillate supplies are increasing. Longer term, the Department of Energy expects diesel and gasoline prices to rise but not by as much as had been previously anticipated.
According to estimates published in Transport Topics, diesel is expected to average $2.26/gal this year and $2.48 in 2010. According to the same estimates, gasoline will average $2.12 this year and $2.30 next year. After a year of crazy ($3.26 average in ’08) gas prices, this recovery is sure to create headaches for product planners. Not only are hybrids no longer the “it” technology, but diesel could maybe, just possibly, become a viable option once again. Who’d have thunk it?
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As I've mentioned before on TTAC, the Best and Brightest need to brush up on their knowledge of oil refining. When you refine a barrel of crude you get some petrol, some kerosene (jet fuel), some diesel and some fuel oil and heavier by products. You can't get 100% petrol or 100% diesel. A refinery can optimize for diesel fuel, but you will always get more gasoline from a barrel of crude than you will diesel. It's a lighter product with less BTU's. Since diesel has industrial uses which supeceed personal transportation in any shortage situation (oil embargo, etc.) you will likely see rationing of diesel long before that of gasoline. It's a risky bet to go with diesel when any economic recovery will likely see massive inflation in that commodity long before gasoline.
My exhaust smells like french fries Paul. I'll die happy! You guys are all way too serious, and taking me way too seriously. I love my Diesel. I like making my own fuel (I have a batch drying as we speak, and another load of WVO going into the processor.) I get 50 MPG routinely without having to watch a star trek-like dash console telling me to annoy traffic behind me of the freeway. I haven't spent a dime with a VW dealer service dept, as my TDI seems to have been built before siesta time, or maybe after, who knows? Bottom line: I'd like to see greater choice of diesel powered cars in the USA, period. Right now you can count them on one hand and have most of your fingers left. That is not enough of a choice, or enough of a market to make judgements about. --chuck
It’s worthwhile clarifying that in the refining process diesel is not just gas that has oil in it, it has a different molecular make up. The refining process distills the various parts from crude oil at various temperatures but gasoline only makes up 40% of that overall pie. Chemical processing (sounds earth-friendly) is used to extract more gasoline from diesel, due to demand. So if shortfalls of diesel drive up prices, then gasoline is partially to blame due to its influence on the refining process. So in essence it’s kind of the chicken or the egg thing. If diesel became popular, then less gas would be extracted from diesel which would keep the price competitive. A couple related links with purdy pictures: http://science.howstuffworks.com/oil-refining2.htm http://science.howstuffworks.com/oil-refining4.htm