Diesel Pump Prices - Quick Observation

Hi Landy,
One thing I don't understand, and I admit it, If the us economy is such a basket case and so are many others, and our economy is in a little better shape than theirs.
At this point we have not had the employment lay off's, we still have pretty much a low unemployment rates compered to other economies. We all so have higher interest rates than most and inflation is not at very high levels.

Why is our dollar worth what it is against the US$?

Hmmm

..and I note again that the terminal gate price difference between diesel and ULP is around 16c/l, but the pump price difference at my local Shell is 33c/l !!!

Diesel users are being ripped off!

This rebate is from the Fed govt
Whats it got to do with pump price or terminal gate price?
JR

There is a good read in the latest 4WD Action on pump prices, it enlightened me to wants going on and I thought I had a bit of a handle on it.

Cheers Bruce.

Deiesel was once half price of petrol .Doubled the price in1979

Further to my note yesterday, this story was out this morning, highlighting that demand for diesel fuels in the US is declining rapidly.

Story follows.

06:06 15Jan09 RTRS-UPDATE 2-U.S. economic slowdown slams diesel demand
(Adds details)

NEW YORK, Jan 14 (Reuters) - U.S. demand for diesel has fallen to a five-year low and could keep slipping as the effects of an economic downturn deepen in the trucking and manufacturing sectors, analysts said on Wednesday.

The drop comes amid a similar decline in American gasoline use that has contributed to a slump of more than $110 in world crude oil prices, adding to the mountain of evidence a financial crisis stemming from the soured U.S. housing sector is hurting consumers and businesses.

U.S. demand for distillate fuels like diesel fell about 5.7 percent in 2008 and posted a dramatic 15 percent slide last week to the lowest level since 2004, according to a report from the U.S. Energy Information Administration on Wednesday.

While data in the EIA report can vary wildly from week to week, energy analysts and economists said the steep drop in implied consumption was a clear sign that the U.S. financial crisis was taking root.

"This appears to be a reflection of the underlying weakness in the U.S. economy," said John Duff, an analyst at the U.S. Energy Information Administration.

"The biggest part of the decline was for ultra-low sulfur diesel, which tends to be used for shipping and hauling and is affected by things like industrial production," he said.

Much of the decline in U.S. diesel demand can be tied to a historic downturn in the trucking sector, hard hit by weakness in the retail and construction businesses, according to the American Trucking Associations. Trucks consumed some 40 billion gallons of diesel in 2008.

"We've taken a really big hit," said ATA Chief Economist Bob Costello.
The amount of freight moved along the nation's highways has fallen by about 20 percent over the past six months, the biggest decline since the group started keeping records in the 1960s, he said.

"If you've got 20 percent less freight, you're going to consume a lot less diesel fuel. The outlook is not good, either. There's absolutely no indication whatsoever that freight volumes will improve this year," he said.

The drop in diesel demand contributed to an increase of 6.4 million barrels in U.S. commercial stockpiles of distillates last week, according to the EIA data. That increase exceeded analyst expectations by nearly six-fold and helped push oil prices down $1 a barrel Wednesday.
The EIA last month became the first high-profile energy forecaster to predict a decline in global petroleum consumption due to the effects of the financial crisis. The last time world energy use dropped was in 1983.