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Discussion Starter #1
Much debate about this. The EPA has mandated that refiners reduce the amount of sulfur in gasoline from 30 ppm (parts per million) to 10 ppm by 2017.

The EPA says it will add $.0069 to the price of each gallon of fuel and $72 to the price of a new car to comply with the new regulations.

The oil and gas industry disagrees and says it will add $.06-$.09 per gallon and will cost the refiners $10 billion in capital cost and another $2.4 billion per year in compliance costs.

I guess it depends on who you believe. If you recall, the spike in diesel fuel price happened about the same time they started selling ultra-low sulfur diesel fuel. According to NACS (National Association for Convenience and Fuel Retailing) the switch to ULSD cost the industry $8 billion in capital costs to comply and added about $.10 to the cost of each gallon.

You can read the entire article here.


Copper
 

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They will say anything to justify raising fuel prices, and it cost less to refine diesel, but it cost more than reg. fuel per gallon. Doesn't make sence.
 

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They will say anything to justify raising fuel prices, and it cost less to refine diesel, but it cost more than reg. fuel per gallon. Doesn't make sence.

Part of the difference is diesel is taxed at a higher rate than gasoline ($.06 per gallon higher).

Another factor is demand. Other countries, where diesel is the predominant fuel, increases demand worldwide for diesel, leading to higher prices. Additionally, in the United States, sales of diesel has increased 29% since 2004 with gasoline consumption falling 5% during the same time period.

Finally, from a barrel of oil (42 gallons) a refiner can produce between 18 and 21 gallon of gasoline, or 10-12 gallons of diesel.

(Information compiled from various internet sources)


Copper
 

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Part of the difference is diesel is taxed at a higher rate than gasoline ($.06 per gallon higher).

Finally, from a barrel of oil (42 gallons) a refiner can produce between 18 and 21 gallon of gasoline, or 10-12 gallons of diesel.

Copper
diesel may be taxed 6cents higher but it sells for at least 50-80 cents more here in Texas.

as for the refiner using a 42 gal barrel, making gas or diesel is not an either/or proposition. gas and diesel are made up of different petroleum products. when the raw petroleum is "boiled off" in the cracking tower, they both separate out at different levels.
so the refiner beating his beast and loudly wailing and sobbing "It costs MORE to make diesel, so we HAVE to charge more!" is all an act
 

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the real real reason is we sell most of it to overseas country where they can get a higher price . price high here so we will use less and they have more to export ! oh i forgot we also have an ******* in the white house !!!
 

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Discussion Starter #8 (Edited)
diesel may be taxed 6cents higher but it sells for at least 50-80 cents more here in Texas.

as for the refiner using a 42 gal barrel, making gas or diesel is not an either/or proposition. gas and diesel are made up of different petroleum products. when the raw petroleum is "boiled off" in the cracking tower, they both separate out at different levels.
so the refiner beating his beast and loudly wailing and sobbing "It costs MORE to make diesel, so we HAVE to charge more!" is all an act

Actually, it normally is an either/or proposition. While you are correct that fractional distillation causes gasoline and diesel to separate out at different levels, most refiners in the United States use conversion to break the longer carbon chains of diesel, and other heavier oils, into lighter products. Because of the demand for gasoline in the United States, a great deal of the heavier (longer carbon chains) oils are converted into the lighter (shorter carbon chains) oils. This allows the refiner to get more gasoline from a barrel of oil than would normally be produced by the fractional distillation method alone.

Like all manufacturing, throughput is key to cost. Most US refiners are setup to do this conversion process to produce lighter fuels from heavier because for years the United States has been a gasoline biased economy while the rest of the world was a (mostly) diesel based economy. That allowed the US refiners to sell their diesel to other nations while we purchased their gasoline. But as the US uses more and more diesel, supplies are getting squeezed for diesel and the price is going up. I suspect that if this trend continues, US refiners will re-engineer their refining process to produce more diesel and less gasoline and we will see an easing of the price, or at the very least, lower increases. The downside is all of us that drive gasoline powered cars are going to get hit in the wallet as gasoline supplies are constricted.

The foremost problem in the United States is refining capacity. We are awash in crude oil from Texas, Oklahoma and North Dakota, but we simply can't refine it all. The United States hasn't built an entirely new refinery since 1976, mostly because of environmental regulations. Unfortunately, our refiners are setup to handle sour crude (like that produced from the Canadian oil sands) and the flood of oil hitting the market just now is light sweet crude, and our refinery system is just not set up to handle this oil efficiently.

Compounding this is the ban on the sale of domestic crude on the open market is illegal (Energy Policy and Conservation Act of 1975) but the sale of refined products is not, so a portion of what we do refine is shipped to other markets where it fetches higher prices.

The good news is refiners are working to add 400,000 barrels a day of refining capacity by 2018 to handle this influx of crude.


Copper
 

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Discussion Starter #9
the real real reason is we sell most of it to overseas country where they can get a higher price . price high here so we will use less and they have more to export ! oh i forgot we also have an ******* in the white house !!!

Here is an interesting factoid ...

From 2005 to 2012, petroleum imports fell 22% but the export of petroleum products jumped 270% during the same period.

I can't blame refiners for wanting to sell their products to the people willing to pay the most for it. I would do the same. But as I stated above, we can't have our cake and eat it too.

We (the people of the United States) are going to have either to compete with the world for our fuel and pay higher prices or we are going to have to increase our supply by allowing additional refineries to be built to keep the cost down.

I know which option I'm in favor of.


Copper
 
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