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How Does The Cost To The Consumer Of Diesel Fuel Get Determined?
By GARKO
The cost of production and delivery of diesel fuel to consumers includes the costs of crude oil, refinery processing, the costs of doing marketing campaigns and transportation costs, and ultimately, the overhead expenses of operating a retail station operation. The ultimate price the consumer pays reflects these costs and the profits (and sometimes losses) of the processors, marketers, transporters, and retail station owners. The proportionate share of these different factors to that price on the sign at the station varies over time and among regions of the country. That final price also factors in excise taxes levied at all levels. In 2006, Federal excise taxes were 24.4 cents per gallon and the States averaged averaged about 21.8 cents per gallon. And some States and counties and cities, etc charge additional taxes. The retail price is also affected by local market conditions and factors such as the location and the marketing strategy of the filling station owner. Some retail outlets are owned and operated by refiners, while others are independent businesses that purchase diesel fuel for resale to consumers.
But, why are diesel fuel prices are consistently higher than gasoline
prices?
Until just a few years back, the typical price of diesel fuel was somewhat lower than the routine price of gasoline. In some cold regions when the demand for distillate heating oil was high, the price of diesel fuel rose above the gasoline price. Since September 2004, the price of diesel fuel in most areas has been somewhat higher than the price of regular gasoline all year round due to different factors. Worldwide demand for diesel fuel has been increasing steadily, with especially strong demand in China, Europe, and the U.S., with little increase in capacity for production. In the U.S., the movement towards low-sulfur diesel fuel has influenced diesel fuel manufacture and distribution costs. Also, the exise tax from the Federal government on diesel fuel is 6 cents higher per gallon than the same tax on gasoline.
So the question becomes. with so many people and industries and different levels of government adding on costs, raising the overall cost to the consumer, how can the individual hope to pay less to operate their vehicles?
Join me at Water4Gas for the best environmentally friendly, gas saving solution Consumer advocate, songwriter, entrepreneur and activist, GARKO, shows you how to increase power and save gas and how to run a car on hydrogen from water which is the best of the ways to save big on gas For a list of current gasoline prices in your neighborhood email garko@startlingdiscoveries.info
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