Delica Canada | Mitsubishi Van Club

Does anyone know why the price of diesel stays at around $1.00 per litre around Van, particularly the North Shore, when regular gas is now around .98 per litre. A couple of weeks ago, diesel was around $1.00 and gasoline was around $1.13.
Is it the same all over the LM?
We are newish to diesel fuel so aren't familiar with the price fluctuations.

Same in Maple Ridge. This still points at gas companies price gouging because if the price of petrol is fluctuating to reflect the price of crude (like they try to say) then diesel should fluctuate as well and it really hasn't. Price was .89/l 3 weeks ago now it has jumped up, however, gas was up and down and has now dropped.

As counter-intuitive as it sounds, the price of diesel is not related to the price of gasoline, they fluctuate completely separately. Traditionally diesel was significantly cheaper than gasoline, however for the past few years that hasn't always been the case. what I find most annoying is that stations rarely post their diesel price, and 2 stations across the street from each-other can be 10c a litre different (or more!) (on a mildly related note, stations often don't even post that they have diesel, which is hard to spot on the pumps while driving by, whereas they have a sign telling the world if they have propane, despite the big obvious tank in the fore-court!)

Diesel and home heating oil tend to be in the same production stream at the refineries, this means that diesel goes up every winter, while gasoline tends to go up in the summer for the "driving season" instead. (gasoline also jumps before every long weekend, while diesel fluctuates less as it's use is primarily commercial and therefore the use stays more constant year round)
As with all fuel prices, it's very difficult to get honest answers out of the oil companies about how they are set, the oil companies claim it is a global market, and use any excuse such as instability in the middle east to drive the prices up, despite vast amounts of proof that it is NOT a global market (watch what happens when 1 local refinery shuts down, not only do the prices skyrocket, but the stations also run out of fuel, if the market was truly global, the 1 local refinery would have no more impact than one on the other side of the world) There's also the usual argument when prices go up that the station immediately raises the price to reflect their "next shipment" however when the prices go down they wait until all the fuel in the ground has been used up to lower them...

If you ever see those pie charts on the Canadian Tire gas pumps that try to claim there's only 2% profit... laugh (or cry) and remember that the huge piece of the pie they have labelled "crude costs" also includes a hefty chunk of profit, and that the "2%" listed is just the end station's profit, not the company's profit.

ok, I think that came off more bitter than I really wanted it to... but anyway, you get the picture, biggest things to remember: diesel price is not related to gas price, nearby stations often have large price differences, and diesel is related to heating oil and therefore goes up if the east has a cold or long winter.

This is one of the great mysteries.

Note how the price of gasoline spikes at the very suggestion of an increase in the price of crude oil, long before the crude bought at that price can possibly have made it to the gas pump. Note too how the price takes its time coming down, always lagging the declining price of crude oil.

One claim is that since diesel is sold in much smaller quantities than gasoline, the gas stations replenish their stock less frequently. The price of diesel already in their tanks doesn't change, since it's already paid for. This doesn't seem to apply to gasoline.

I've been paying $1.00 litre +/- about 5 cents all summer.

...laura, as mystified as everybody else

Always strange to me that Diesel has always been way more expensive than gas is the U.S.A., but traditionally the other way around in Canada.

The mysteries of diesel are explained here.

http://en.wikipedia.org/wiki/Diesel_fuel

bosc wrote:Always strange to me that Diesel has always been way more expensive than gas is the U.S.A., but traditionally the other way around in Canada.

Diesel is a supply and demand market, same as gasoline, and it is a MUCH smaller market (comparatively) than gasoline. Americans have a real aversion to diesel (thanks California), and this is why so many car manufacturers have been reluctant to produce diesel vehicles. Those who do produce diesel vehicles, the Audis, the Volvos, the VW, the BMWs, et al, have been reluctant to introduce their diesel vehicles into the North American market because they won't sell. And finally, considering the Canadian market is comparable to that of California (numbers-wise), if they ain't gonna sell 'em in Cali, they ain't gonna sell 'em here.

Now, the diesel vehicles that do get sold here tend to be agricultural or industrial. And it won't just be the combine and the tractor and the speader that the farmer's driving that will be diesel, it'll be his pickup truck as well. But the bigger portion of our diesel sale is in the home heating oil market (the two are pretty much the same, just there is detergents in diesel for the cleaning the system): we use more of it than America, so the price is generally lower. Supply and demand.

Diesel is a supply and demand market, same as gasoline, and it is a MUCH smaller market (comparatively) than gasoline.

I think that statement is incorrect. Diesel used in automobiles is a much smaller amount than gasoline used for the same purpose, but Canadian annual diesel consumption is roughly the same as gasoline consumption (about 40 billion litres per yr) thanks to almost exclusive use of diesel in large trucks and off road vehicles.

There are not a whole lot of refineries in North America, so the loss of one (hurricane Katrina) or more will cause speculative price bumps almost immediately. I don't think a new refinery has been built for many years, nor has there been any significant expansion of production capacity. Some capital infusions have gone mainly into lower sulfur fuels to meet tougher environmental standards. So production capacity is barely adequate to meet consumption demands, although the recent recession has caused a dip in demand.

As to why diesel price does not rise and fall with gas price....seasonal demands are different than gas, as already mentioned. Right now refineries are focusing on diesel production to meet peak winter demand. (In the spring they will change focus and produce more gas in preparation for the summer season.) Should the coming winter be colder or longer (or be perceived by speculators to be colder or longer) than normal we will likely see a rise in diesel price.

If you check out the link I supplied in my last post you will get some interesting info on energy comparisons between diesel and gasoline. Diesel not only contains more energy per equivalent gram of fuel, but it also has a higher density. So you get a double benefit in terms of km per liter consumed. Regardless of what fuel you use, it's a pretty good bargain when the price is compared to milk, or even bottled water....both of which are found aplenty on surface and are not subject to the extensive refining and transportation requirements of crude oil.