|
On a recent radio program, the forecast for diesel prices to stay high or go up. Why? When refining a barrel of oil (actually 42 gallons), the refiner gets 20 gallons of gasoline, 12 gallons of diesel, and then all the other stuff. This is basically fixed. So, the demand for gasoline is flat--no real growth projected in the future due to fuel economy, etc. For Diesel the use is increasing in commercial trucks, and other uses. Then in 2020 the ships using dirty diesel will convert to low Sulphur diesel. Diesel demand will grow. To meet the demand, refiners will produce more diesel and also get more gasoline. I don't know what a fix may be. So far the fix is lower price of gasoline and the higher price of diesel.
|