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-   -   Diesel so expensive here (http://www.peachparts.com/shopforum/diesel-discussion/214802-diesel-so-expensive-here.html)

vahe 02-26-2008 09:04 AM

Diesel so expensive here
 
Yesterday I was taliking to a friend in Europe, over there nearly half of all passenger cars are diesel and the price of diesel fuel is roughly 30% less than gasoline, here in US diesel is 5% more expensive than premium gas, why?
Europe is every bit as dependent on foreign oil, even more so than the US, so all factors for pricing diesel apply to them equally, and Europe had the ULSD for a much longer time, so how does one explain the price difference ratio? a rip-off?

Vahe
240D 77

ForcedInduction 02-26-2008 09:14 AM

Supply and demand. Europe has over 50% of new cars sold Diesel while the US is less than 5%, including pickups. Little demand so the cost to produce is high.

vstech 02-26-2008 09:19 AM

that 30% lower than gas price is still double what we pay over here is it not? what are you paying, like $1.5/liter or something? I believe, it's due to heating oil production, and distribution, and of course, it's high because we will pay it.

pawoSD 02-26-2008 09:25 AM

A higher amount of people in Europe rely on heating oil (diesel) to heat their homes, which makes it expensive there....and there's a LOT of fuel tax also. Which is GOOD, because they have nice SMOOTH roads that don't destroy their cars. You can barely drive around here the roads have gotten so bad.

Diesel is expensive in the US because the refiners are only working the meet the bare minimum of diesel needed. Refineries here are set up to produce gasoline for the most part, and a lot less diesel. So with the increase in trucking we've seen over the past several years, everyone is competing for diesel.....if they would build in more refining capacity for diesel it'd alleviate the problem somewhat.

A big part of it is also Big Oil + the government. They know that if 50% of the US drove diesels, their profits would sky dive because of a much lower demand for fuel as all those cars/trucks would be far more efficient. So they lobby to keep diesels out of the picture and force people to keep using a ton of gasoline.

My dad was just in Germany for 3.5 weeks in January and said diesel is around $6.50 - $7 a gallon when you do the conversion.....and gasoline is between $7.50 and $8.50 a gallon. :eek: So before you complain too much, think about that. ;)

Dee8go 02-26-2008 09:29 AM

I read in Car and Driver last night that gasoline in Germany is $7.00 a gallon. Whowee! Ours seems like a bargain compared to that. I think the government makes it artificially high there to encourage people to ubuy diesel cars.

Ether 02-26-2008 09:42 AM

Quote:

Originally Posted by ForcedInduction (Post 1774946)
Supply and demand. Europe has over 50% of new cars sold Diesel while the US is less than 5%, including pickups. Little demand so the cost to produce is high.

That would actually be counter to the theory of supply and demand wouldn't it? If a product is in little demand then the price would trend lower in order to induce more demand and vice versa.

One theory I have heard to justify the high cost of diesel is that the refining process has had to be modified to produce ULSD and those costs are being passed on to us schmucks the consumers.

aklim 02-26-2008 09:50 AM

Quote:

Originally Posted by pawoSD (Post 1774963)
They know that if 50% of the US drove diesels, their profits would sky dive because of a much lower demand for fuel as all those cars/trucks would be far more efficient.

Why should they care? What you don't buy, they can sell. It's not like we are the only buyer. Load it onto a ship and they can sell it to most anywhere. You can always use fuel in the world.

barry123400 02-26-2008 10:37 AM

When comparing fuel costs in different countries their average wage base and tax setup has to be examined. I think north america does not have the highest wage structures by far. Could be wrong yet things I hear indicate otherwise.

ForcedInduction 02-26-2008 10:38 AM

Quote:

Originally Posted by Ether (Post 1774991)
That would actually be counter to the theory of supply and demand wouldn't it? If a product is in little demand then the price would trend lower in order to induce more demand and vice versa.

Other way around. High volume items are cheaper to produce. They don't want to induce more Diesel demand. The refineries are set up to produce mostly gasoline, it would cost them money to shift production focus to something else.

Quote:

Originally Posted by aklim (Post 1774998)
Why should they care? What you don't buy, they can sell. It's not like we are the only buyer. Load it onto a ship and they can sell it to most anywhere. You can always use fuel in the world.

Because that would mean less cheap gas available over here. Diesel can be cracked down into more gasoline.

aklim 02-26-2008 10:43 AM

Quote:

Originally Posted by ForcedInduction (Post 1775078)
Because that would mean less cheap gas available over here. Diesel can be cracked down into more gasoline.

I can see that. However, my question is that if you don't buy their diesel, what is stopping them from dumping it into a tanker and send it to somewhere that will buy it?

ForcedInduction 02-26-2008 10:46 AM

Storing it in a tank and selling it later.

pawoSD 02-26-2008 11:22 AM

Quote:

Originally Posted by barry123400 (Post 1775077)
When comparing fuel costs in different countries their average wage base and tax setup has to be examined. I think north america does not have the highest wage structures by far. Could be wrong yet things I hear indicate otherwise.

Very true. In Germany the minimum wage is like 8 or 9 euro per hour....thats like $14-15 US per hour! nearly 3x the US federal min wage! :eek: I wouldn't care about higher fuel prices at all if I was making $13+ an hour at my school job!

rs899 02-26-2008 11:27 AM

..they also have higher taxes in Europe, but more services like health care. It is impossible to compare small pieces of the picture.

imagesinthewind 02-26-2008 12:21 PM

Quote:

Originally Posted by vstech (Post 1774953)
it's high because we will pay it.

Since we truck everything across the country (though we have a very good RR system in this country) loads of diesel gets used.
The oil companies had an epiphany that raising the price of diesel would make them more money and BIG Oil is still bigger than the Teamsters so Big Oil Wins!
I think the price of diesel is the bigger reason Exxon-Mobil made $36B in profits last year.

Thirty Six BILLION in profit. Let that roll around the mouth for a minute or two. 36 BILLION. Wow, boggles my puny mind.

GREASY_BEAST 02-26-2008 12:49 PM

Quote:

Originally Posted by imagesinthewind (Post 1775215)
Since we truck everything across the country (though we have a very good RR system in this country) loads of diesel gets used.
The oil companies had an epiphany that raising the price of diesel would make them more money and BIG Oil is still bigger than the Teamsters so Big Oil Wins!
I think the price of diesel is the bigger reason Exxon-Mobil made $36B in profits last year.

Thirty Six BILLION in profit. Let that roll around the mouth for a minute or two. 36 BILLION. Wow, boggles my puny mind.

That's a scary huge number. Many people in government are also undoubtedly reaping benefits, or else there would be some sort of regulation on energy prices to keep things a little more realistic... lets face it, where are those 36B$ profits actually going? I highly doubt it is going to improving energy technology...


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