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jlf1961 -> RE: A Little Perspective on Fuel Prices (6/14/2008 6:49:40 PM)
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quote:
ORIGINAL: pahunkboy
lol a penny a gallon. i dont believe that
It is a penny a gallon on gasolene.
As I said, diesel is basically a free product to manufactor, the cost of the crude is absorbed by the gasolene, which is still the largest fuel produced.
The diesel engine was originally developed to run on vegatable oil. In fact, it still can be run on vegatable oil, after the oil is thinned.
The reason that the engines ended up running on what is now called diesel is because the oil companies in the early 1900's began to see a new market for what was then being sold as part of bunker oil, which was becoming a new way to power ships boilers.
Seeing that the engine was making its way into the public use, oil companies kept the diesel seperate and began selling it. Kerosene was at the time strictly used for heating and lighting.
Up until the 70's, diesel was still primarily a commercial fuel, until the gas crisis of 73. After that, cars went smaller, foreign importers discovered a new market for their diesel cars, and the price began a slow climb.
In 1974, diesel was $.159 a gallon. In 1976, it was $.489 a gallon, gasolene was already at $1.009 a gallon in some places, from $.239 in 1973.
1976 was the year that many US auto makers began offering deisel engines in cars and trucks.
In 1980, the national gasoline price per gallon was $1.259, diesel was bumping $.999 a gallon.
In 1986, diesel hit a nice $1.499 national average, and gasolene was $1.359 a gallon. Since then, diesel has remained more expensive than gasolene.
Fuel producers claimed it was because of higher demand. Well, to get diesel, you have to refine all the light products off first, since diesel is one of the last 3 heavy products. You cant take the lighter products and turn it into diesel, it doesnt work that way.
So, producers are basically getting the diesel product for free. Taxes and cost to market and distribute diesel is the same for gasoline, EXCEPT for commercial over the road use.
In that area of diesel usage, the trucking industry gets nailed with some additional taxes, fuel usage tax, which varies by each state, a federal fuel tax, which is figured by the total miles the truck has driven, by month. These taxes are not paid at the pump, but quarterly to the Federal and state departments of transportation.
This equals approximately an additional $1.25 a gallon.
Now, the Tax exempt diesel, and there is tax exempt use, is for farm equipment and the reefer fuel for refridgerated trailers.
Now, locally, deisel is $4.309 at the pump, when you subtract the taxes and marketing/distribution costs, that leaves a profit of a measly $3.579 per gallon profit.
However, people are just looking at the fuel prices, and when they see a 1 cent profit on gas, they too dont believe it.
But, off every gallon of crude oil, you get, motor oil distillates, benzene, butane, propane, and the componants to more than a hundred industrial and household products. If you use any product in your home that has a hydrocarbon base, that hydrocarbon came from an oil company, with the exception of food oils.
Look around the house, you will see just how many petrolum based products are there.
Women, unless you are using an acetone free nail polish remover, you are useing a petrolum product. If you have vinyl, rubber, plastic, formica in your home, you have petrolum products.
If you have tempered glass in your doors or windows, they have a petrolum based plastic in them. If you ride a bicycle, you use a petrolum product in the chain grease. Even lithium based grease has a petrolum product in it. There is petrolum in rayon, nylon, polyester, paint, spandex.....
Gasolene and diesel are no longer the cash cow products for oil companies. They could completely get out of fuel production and still be making profits of billions of dollars a year.
So, why are you surprised that there is only a penny profit on a gallon of gas?
There is not another base product that has so many end products.
Castrol, Quaker State and Penzoil all were once in the fuel production industries. They sold off all those holdings, kept what was needed to refine thier cash cow products, then when get what they can, they sell the left over petrolum base to someone else to be used to make something else.
There are over a thousand hydrocarbon compounds in a gallon of crude oil, some in large percentages, some in very small amounts, but they all come out in the cracking towers.
Up until federal emission standards began restricting the sulfer emissions from fuel products, most of the sulfer used was mined, now it is purchased from oil companies. They have to do something with the stuff....
Petrolum also has a number of nitrate compounds, so those are sold off.
At one time in the petrolum industry, the cost of crude oil was essentially ZERO, after all the products were refined off it. Now that is no longer true, but if things were really so tough for the oil companies, why are they STILL showing a higher profit than most other industries?
How many members of this forum was aware that the petrolum industry was ACTIVELY supporting alternate fuels such as hydrogen peroxide, hydrogen fuel cells, and all those other clean burning, zero harmful emission fuels?
There is a purely economic reason, everything used in those alternate fuels from isopropol alcohol to hydrogen can be refined in an oil refinery. We finally have the technology to remove 100% of the carbon from crude oil distillates, leaving nothing but hydrogen compounds.
No hydrocarbon fuels, no pollution. The technology for getting those compounds came straight out of germany at the end of ww2, in fact, the last three types of german uboats produced burned hydrogen peroxide. The present class of modern coastal patrol uboats in Germany h2o2....
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