I hope I'm not violating any privacy rules by slapping this up here, but my buddy Mike, back home after trips out to California and down to Roanoke/Blacksburg (Virginia), had this interesting thing to say about current gas prices and diesel prices in the US:
Diesel prices. While regular gas prices have been dropping here in the US. My local Wawa was down to $3.05/gallon - the lowest it has been since mid-2021. The price of diesel has not dropped at all. I believe, but have no clear evidence to support this theory, that the Biden Admin has been pressuring refiners to produce more gas, but not more diesel. As Americans see the price at the pump as a clear indicator of inflationary woes, they are less likely to see the effects of diesel being so high. As diesel is used to transport just about everything that cost gets hidden in the cost of pretty much everything you buy. I think that the Administration (probably rightfully in fact) can use the gas price to say that things aren't as bad as you think they are because gas prices are going down. Never mind everything else being pressured upwards by higher diesel prices.
So it's a shell game. (Gas brand-name pun not intended.) And the email in which Mike talked about the above covered much more than gas and diesel prices.
2 comments:
I seriously doubt that is happening. Being involved in the oil industry, the processes to make gas and diesel are vastly different. Everything from feedstock (types of crudes), initial processing, chemistry, process units, etc. You cannot make diesel in a gasoline processing unit, and vice versa. Diesel has very similar properties to home heating oil, so it is natural that demand for diesel like products goes up in the winter. For gasoline, refiners go to a winter blend (lower RVP) which is cheaper to produce. Combine that with the fact that refineries have traders that are doing long term purchasing of crude and looking at market trends months out, I think there is pretty much zero chance pressure from the US government causing the price discrepancy.
I appreciate the insider perspective, but I wouldn't put it past this administration to engage in some behind-the-scenes jiggering.
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