Re: why is diesel so expensive then gas?????

Posted by chris cogburn on March 01, 2006 at 16:34:39 from (207.207.39.39):

In Reply to: why is diesel so expensive then gas????? posted by all for school on March 01, 2006 at 07:38:28:

I beg to differ, Rusty. All the folks I'm referring to live in Houston and have been around refineries a LONG time: petroleum engineers, chemical engineers, geophysicists, even bona fide rocket scientists (no joke; my uncle designed manuevering rockets on the lunar lander). I don't know diddly about the whys and wherefores, but they ALL said diesel costs somewhat more to produce. They said the vapor pressure is higher than gasoline, or something like that, upon which my eyes glazed over. In college I avoided such topics like the plague; I had enough trouble with Chem 101. I know just enough about a distillation stack to know I don't want to know any more.

BUT supply and demand play a MUCH larger part in the setting of prices for such commodities as fuels. And it is likely that many of the fuel subsidy programs have been gradually phased out, allowing producers to charge whatever they can get away with; can you say Exxon-Mobile?

Speaking of which, the whole ExxonMobile profits debacle, while newsworthy, should be put into perspective. They made about 9% profit margin on their record profits. Compare that to Intel, Microsoft, AMD, etc. etc. etc. If those companies don't get double-digit profit margins, the stockholders go ballistic. And health insurance companies? They SET their profit margin at 25% (!!!) and raise premiums and reduce benefits and kick dogs and steal candy from babies and whatever else they have to do to get that margin. Where I work (a little product development outfit), if we got double-digit profit margins we'd be dancing in the street. I'm not defending Big Oil; I still think they're a bunch of crooks. But it's important to keep things in perspective; yeah, they made a pile o' money, but they also SPENT a pile 'o money getting that precious lifeblood to you. The oil business is incredibly capital-intensive, as their margins illustrate.

No matter. At least we don't have to pay what Europeans pay. We'd be eating nothing but tortillas and beans (or beans and rice, or just plain beans, depending on your part of the country) just to put enough fuel in the tank to get to the store to buy more beans!

Okay, enough ranting. I'm the first to admit I don't REALLY know why diesel costs more, I'm just saying what I've been told by many reliable, educated, independent sources.

Happy Tractoring!

c.

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