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Why is Diesel 80 to 90-cents/Gal. higher than Unleaded Gas?

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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Several weeks ago I saw a big jump in diesel prices and a drop in gasoline prices. Not sure if its just my area of the country (Northwest Indiana). Diesel here is running about $4.05 per gallon, regular unleaded has dropped down to about $3.15.

I know the US is an EXPORTER of diesel fuel but this is pretty crazy.
 

fogtender

Now a Published Author
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Several weeks ago I saw a big jump in diesel prices and a drop in gasoline prices. Not sure if its just my area of the country (Northwest Indiana). Diesel here is running about $4.05 per gallon, regular unleaded has dropped down to about $3.15.

I know the US is an EXPORTER of diesel fuel but this is pretty crazy.


It's because they can.
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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Foggy, I don't doubt that, but up until very recently the price of diesel has been only about 20 to 35 cents more than regular gas. Why all of a sudden did the difference jump up to 80/90 cents per gallon?
 

FrancSevin

Proudly Deplorable
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Several weeks ago I saw a big jump in diesel prices and a drop in gasoline prices. Not sure if its just my area of the country (Northwest Indiana). Diesel here is running about $4.05 per gallon, regular unleaded has dropped down to about $3.15.

I know the US is an EXPORTER of diesel fuel but this is pretty crazy.

It's the "new Diesel" The refiners must remove so much more of the sulfur because of a feederal mandate that went into effect 2007. And you all thought only the Left made things more expensive to be green.

BTW Biodiesel would have solved this issure without the extra refining.
http://www.purdue.edu/uns/x/2009a/090609LumkesBiodiesel.html

But we got ETHANOL instead.

Is this a great country or what?
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
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Franc I don't think so. We've have low sulfur diesel for several years.
 

FrancSevin

Proudly Deplorable
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Franc I don't think so. We've have low sulfur diesel for several years.

I din't say different. Pay attention.

We have had low sulfur for year.....2007 to 2011 yeah that would qualify.

It costs more to do it and if all the feed stocks are heavier in sulfur then
the fuel will be higher.

We are currently experiencing a shortage of diesel nationwide. But particularly severe in the mid west. Kansas, Nebraska, Oklahoma, you know the states that would have been served by the new, but put on hold pipeline?

This has caused a shortage of fuel because the refiners simply cannot keep up with current demands.

Some major truck stops have literaly shut down over this.
http://journalstar.com/business/loc...cle_55315a50-5252-54ab-a670-8142ef03f5b4.html
 

REDDOGTWO

Unemployed Veg. Peddler
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I have seen diesel at 70 cents to a dollar ten higher than gas around here.
 

FrancSevin

Proudly Deplorable
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Diesel generaly runs about even with Premium Gasoline around here. But it is up from that lately.
In 2003 Diesel was at $1.00 to $139 a gallon. Keep in mind everything you buy in the store is delivered by diesel somewhere along the way form producer to retail.
Imaginge being an independent Over the Road trucker who's main cost component is now four times what it was just a few years ago.

But don't fret folks. White House says there is no inflation going on. :hammer:
 

Adillo303

Diesel Truck Fan
GOLD Site Supporter
The price difference is not that great here. At the moment.

I would suggest that you use www.gasbuddy.com and find the lowest price in your area and patronize them. It also helps if you report low and high prices in your locale.

That is capitalism and it works.
 

Dargo

Like a bad penny...
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I didn't buy yesterday, but regular unleaded was $3.02 at truck stop and (cash) diesel was $4.15! WTF?!
 

nixon

Boned
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Probably wrong about this,but doesn't the price of diesel usually take a big jump up at the start of the heating season every year ?
I seem to remember it being that way........ Combination of supply and demand and because they can ?
 

pixie

Well-known member
SUPER Site Supporter
Diesel usually goes up when heating oil season kicks in. Higher demand.
I gather that demand is escalating around the world and more diesel is being exported from the US. I looked around on the internet and diesel prices are similar to ours in the countries we are exporting to.
Kind of sad that there are bad spot shortages in states like Nebraska where lots of truckers buy fuel because of lower state taxes.

ETA: Nixon beat me to it :)
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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Well I have about 500 gallons in the tank now, looking to add another 500 gallons but at these prices I'm not going to rush out and fill up now.
 

300 H and H

Bronze Member
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Also some believe the industry is trying to justifie the pipeline from the canadian oil sands. I predict a spike in prices over the delay of this important project. Untill recently there were much lower prices in the area the pipeline was to be built, because of excess supplies. Now it going to go the other way. ULSD is the road version, and it is about $1 per gallon higher than off road fuel. It is JUNK and will destroy the injector pumps on the older engines over time. It has very little lubrisity or lubrication value in it. If we are the only ones using USLD them we are fools, hamstinging our transpotation infrustructure and driving up prices and the cost of diong business. The EPA is quite effectively regulating the diesel engine out of existance. 2% soy diesel added gets the lub back in USLD.

Biodiesel plants in my area were closed two years ago. Now they are operational and nearing capacity.. I'll have to enquire with the CEO of R.E.G. why that is....

Kirk
 

Av8r3400

Gone Flyin'
Every winter diesel prices spike.

Diesel = Home heating oil.

Winter = decreased supply of home heating oil = increased price (on top of the gouging for a better, more efficient fuel).



And to all the ethanolics out there that frequent this board, why aren't we making biodiesel from all the bio-waste material that doesn't go into the food stream? It's a better more ecologically friendly fuel that is not a net energy loss made from a readily available waste product.

Oh, yeah. Nevermind.
 

Dargo

Like a bad penny...
GOLD Site Supporter
Well I have about 500 gallons in the tank now, looking to add another 500 gallons but at these prices I'm not going to rush out and fill up now.

That's about what I have, but if I do much work with my big track loader (really big skid steer on tracks), it will drain it's 40 gallon tank by lunch break. 500 gallons doesn't go far that way; especially when all my diesel is non-dyed fuel and I burn it in my pickup too. That brings up another issue; how in the hell is it that I can get TAXED on road diesel in my area for a few cents LESS than #2 dyed off road?! It seems that if you want less than 1500 gallons, they don't want to mess with you. My little 110 gallon tank in the back of my pickup has been great. I see a really good price on diesel, I fill my truck and that tank too. When I get home I just pump that tank empty into my large tank.

When I bought my 550 gallon tank, it cost me $800 even for the brand new tank (purchased, not leased) filled with fuel. Things are a bit different now!
 

mla2ofus

Well-known member
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That's about what I have, but if I do much work with my big track loader (really big skid steer on tracks), it will drain it's 40 gallon tank by lunch break. 500 gallons doesn't go far that way; especially when all my diesel if non-dyed fuel and I burn it in my pickup too. That brings up another issue; how in the hell is it that I can get TAXED on road diesel in my area for a few cents LESS than #2 dyed off road?! It seems that if you want less than 1500 gallons, they don't want to mess with you. My little 110 gallon tank in the back of my pickup has been great. I see a really good price on diesel, I fill my truck and that tank too. When I get home I just pump that tank empty into my large tank.

When I bought my 550 gallon tank, it cost me $800 even for the brand new tank (purchased, not leased) filled with fuel. Things are a bit different now!

I'm sure you already know this, but don't get caught running offroad diesel in the P/U. The fines are awfully steep.
Mike
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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That's about what I have, but if I do much work with my big track loader (really big skid steer on tracks), it will drain it's 40 gallon tank by lunch break. . .
I don't have the big equipment to eat up the fuel. Sipping my fuel are 2 compact tractors and a 40mpg diesel car. I'm looking at getting a second 40mpg car next spring. If I fill up all 1000 gallons I will be able to drive 2 cars for about 15 months before I have to refill the tanks.

I was hoping for winter-blend fuel, but not at these prices. I'll just have to fill up when prices drop and condition the new fuel for year round use.
 

300 H and H

Bronze Member
GOLD Site Supporter
Av8er3400

Yup,

Seasonality in the heavy oil market is always there, to some degree. I like to wait till after the first of the new year to buy the needs for the comming year. Usually a big sell of occures in Jan.. I need about 7,500 gals of off road, BTW.

Animal fats are big in Bio diesel, and from what I have heard were always a planed part of the mix. Hope this is a good surprise to you, we're already there.

Dargo, $5K per vehical if your caught...in my state anyway...

Regards, Kirk
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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Animal fats are big in Bio diesel, and from what I have heard were always a planed part of the mix. Hope this is a good surprise to you, we're already there.
I'd love to find Bio-Diesel in my area, but can't find it at any of the local pumps. It may be in the blend, but its not indicated on the pump.
 

300 H and H

Bronze Member
GOLD Site Supporter
THis is cut from the REG web site, and is an interesting read o bio diesel, from a foremost producer. The CEO is friend of mine....

Biodiesel plants back from the brink

Across the nation, biodiesel plants have been restarting or ramping up production, spurred by a revived federal tax credit and renewable energy mandates.


September 19, 2011|By David Shaffer
Reporting from Glenville, Minn. — For more than three years, the SoyMor Biodiesel plant sat idle — victim of a slump that took down more than a quarter of the plants in the industry.
But biodiesel is booming again, and a sign of the revival happened recently in this small southern Minnesota town. Workers started up the plant, and soon the fuel was flowing.


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"Everybody kept their fingers crossed and hoped it would be a lot shorter," rehired worker Aaron Kuennen said of the long layoff as he unloaded tanker trucks full of soybean oil Thursday.
Across the nation, biodiesel plants have been restarting or ramping up production, spurred by a revived federal tax credit and renewable energy mandates. The industry's trade group, the National Biodiesel Board, last month reported that U.S. production was headed toward a record year after three consecutive months of record output.
It comes after biodiesel's big bust. At least 52 of the nation's 170 biodiesel plants were idled last year, and others scaled back production, according to the U.S. Environmental Protection Agency. In the two years that ended in December, output of U.S. biodiesel for trucks and heavy equipment fell 54%.
In Minnesota, the Glenville plant was among the first to shut down. Its local owners last month sold the plant to the Ames, Iowa, company that built and formerly managed it, Renewable Energy Group Inc.
The plant's sign now is draped with a temporary one bearing the company's initials: REG.
Another of Minnesota's four biodiesel plants, FUMPA Bio-fuels in Redwood Falls, has remained closed since December. The plant, the state's first biodiesel producer in 2004, is for sale, and because it's small and portable, it probably will be moved after it is sold, said Chuck Neece, who heads the biofuels division of the cooperative that owns it.
The U.S. biodiesel industry grew out of a desire by soybean farmers to get better prices early in the last decade.
Minnesota began requiring that biodiesel be blended into diesel fuel sold at pumps in 2005 and now mandates a 5% mix. Nineteen other states offer various incentives in addition to the federal tax credit that has encouraged blenders to use biodiesel in motor fuel.
At first, biodiesel producers relied almost entirely on soybean oil as a feedstock, subjecting it to a chemical reaction with alcohol to produce fuel similar to petroleum diesel. Some plants now have the technology to process waste oils from restaurants and unrefined oils and fats from rendering, meatpacking and ethanol industries. About half of U.S. production still is derived from soy oil, industry officials said.
In the industry's first boom, U.S. output expanded eightfold from 2004 to 2008, peaking at 691 million gallons annually.
"It was awfully exciting," said Ed Hegland, a farmer near Appleton, Minn., who served as chairman of the National Biodiesel Board from 2007 to 2010.
Then the troubles hit — the global financial meltdown, trade barriers that hurt sales to Europe and high soybean prices, Hegland and others said. The worst blow came last year when Congress temporarily eliminated a $1-a-gallon tax credit to encourage blenders to use biofuel.

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"It was extremely difficult to see a renewable energy industry that was just getting legs under it to be so dramatically set back by a number of things out of our control," Hegland said.
At the Glenville biodiesel plant, one of two large Minnesota plants with capacities of 30 million gallons a year, the end came suddenly in March 2008. Rachel Asmus, who recently returned to run the plant's lab, remembered the shock and sadness. "One week I had a job," she said. "Then they told us we wouldn't have jobs at the end of the week."
Biodiesel's revival began after Congress in December restored the tax credit for one year and the EPA established higher biodiesel blending mandates under its renewable fuel standards.
At some plants, production ramped up immediately. But the SoyMor plant in Glenville remained idle until it was sold in July in a stock transaction to REG, the nation's largest biodiesel producer.
In a major industry consolidation, REG has acquired three other plants in the last 18 months. It wants to raise $100 million in an initial public stock offering to acquire another plant it now leases. It also wants to complete work on three plants whose construction was halted during the biodiesel bust.
Myron Danzer, who manages the Glenville plant and two others for REG, said the restart went smoothly. Some electrical components had been damaged by a voltage surge. One pipe was damaged by freezing, others needed to be cleaned and everything needed to be tested, he said.
He hired 20 people, including five former workers, and by Wednesday the first soybean oil was pumped into the system. Six hours later, at 9:14 p.m., Danzer was holding a flashlight and "sitting up on the tank waiting for it to come in." After the first gallons flowed, everyone gathered in the plant's control room to celebrate.
 

Dargo

Like a bad penny...
GOLD Site Supporter
I'm sure you already know this, but don't get caught running offroad diesel in the P/U. The fines are awfully steep.
Mike


That would be hard to happen since I ONLY buy on road, taxed, diesel. You must have misread something about off road. It's been so long since I've purchased any dyed diesel that I haven't had a tinge of color to my diesel in years.
 

Dargo

Like a bad penny...
GOLD Site Supporter
I'd love to find Bio-Diesel in my area, but can't find it at any of the local pumps. It may be in the blend, but its not indicated on the pump.

That's all that's available in my area; on road, or price jacked off road.
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
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That's all that's available in my area; on road, or price jacked off road.

What blend?

I know some of the tractor companies allow 100 Bio. But most of the car engines have the warranty voided out if the blend is more than 10% Bio to 90% Dino Diesel. Not sure about heavy trucks.
 

300 H and H

Bronze Member
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REG recommends the 2% minimum for fuel lubrisity equal to the old diesel or to off road. Off Road is in the 10 year phase out of a cutting back sulfur to USLD standards in 2017...I think.

100% is quite useable though, but usually not available. Since the plants are up and running, thanks to the renewal of the tax credit, I think it will be available soon.

Here is the link to REG...

http://www.regfuel.com/

Regards, Kirk
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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...100% is quite useable though...
Yes, if you have the emissions system to handle it. VW and MB both, in their current EPA approved engines, will not handle anything over 10% Bio. I think the VW engines may only run 5% Bio. I'm not sure about the BMW diesel engines. The older VW and MB engines (2009 and older) will run 100% Bio, but the EPA mandates require a much stricter emission system and Bio-Diesel tends to gum them up.
 

muleman

Gone But Not Forgotten
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Most of the midwest price spikes are being caused by a big increase in exports to central american countries. They get more money for it so they ship it down the river and load it in tankers to cross the gulf. When they jack the price high enough there will be plenty available. Our reg. gas is down to $3.45 but onroad diesel is running $4.14 right now. Kero is at $4.00 and that is dyed not clear. The EPA regs. have caused the shutdown of 4 major east coast refineries in Delaware and Pa. which adds to the problem.
 

Dargo

Like a bad penny...
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What blend?

I know some of the tractor companies allow 100 Bio. But most of the car engines have the warranty voided out if the blend is more than 10% Bio to 90% Dino Diesel. Not sure about heavy trucks.

Since 10% is what everything in my area is, I assumed that was standard. I've not seen anything different than that except guys who go fight for used grease at restaurants. Then what I hear is that they generally spend a few thousand on their "still", a few thousand converting their engine and installing a heater for the fuel, several hundred for their grease tank in their truck, then spending thousands more taking out injection pumps etc. when their filtering job isn't that great. Most cases I know of the guys spent around $15k to get their truck setup to run on grease and the filtering setup and almost all have constant problems with plugged injectors and ruined injection pumps. After a year or so, they dump everything for about a $25,000 loss and go back to buying fuel at the pump. Oh, that doesn't count all their time and fuel going to collect the grease, fighting others for the grease and expense for filters. I'll leave the fuel making process to the experts.

Most of the fuel I burn is actually pumped from the ground within about 100 miles of where I live and refined about 18 miles from where I live. Here is their site CountryMark
 
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