Why Does The Price Of Diesel Fuel Change So Much? |
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| Written by Denise Deanison | |
| Sunday, 30 November 2008 | |
I Wonder Why The Price Of Diesel Fuel Change So Much?The compression ignition engine was invented in 1892 and soon became known as the diesel engine. Fuels for the diesel ingine have been widely debated. The most common are diesel fuel and modified vegetable oil. Crude oil produces the most common diesel fuel in use today. Commercial businesses that deliver goods are the most common customers. Commercial machinery also consumes a large quantity of diesel fuel. As a result of it's effect on the economy it is critical to understand how the fuel is produced and pricedDiesel fuel is produced to different levels of distillates or grades. Distillates are simply liquids that have been distilled or refined to a certain grade. The most common distillate used by diesel engines in the United States is No.2. This fuel can also be used for heating. Distillate No. 2 is used because it has a low amount of sulfur. Due to new regulations effecting sulfur content in diesel fuel Low Sulfur Diesel (LSD) fuel was replaced by Ultra Low Sulfur Diesel (ULSD) fuel. By 2010 highway vehicles will be required to use Ultra Low Sulfur Diesel fuel. By 2015 the United States will primarily be an Ultra Low Sulfur Diesel fuel country. The change from LSD to ULSD will be most noticeable in the parts per million (ppm) of sulfur found in the fuel. LSD contains 500 ppm sulfur. ULSD contains 15 ppm sulfur. A barrel of crude oil can produce many products including liquefied petroleum gases, heavy fuel oil, jet fuel, diesel fuel, gasoline and heating oil. Vegetable oil can also be used in conjunction with other ingredients to produce Biodiesel. Biodiesel can also be made from animal fats or recycled restaurant grease. This biodegradable fuel has proven to reduce the emissions of particulate gases. Diesel is used in almost all semi-trucks, delivery vehicles, trains, buses, boats, farms and constructionequipment. In the year 2007 75% of diesel fuel was used by on highway vehicles. The remaining 25% was used by off highway equipment such as construction and farming and motors in military, railroad, heating equipment and marine water crafts. In 2007 the United States imported approximately 4.5% of it's diesel fuel from Canada and the Virgin Islands. Unfortunately 66% of the crude oil used to produce the remaining percentage of diesel fuel was imported from foreign countries in 2007. Diesel fuel is transported primarily by pipeline, barge or rail to loading areas where it is loaded into tanker trucks and delivered to retail locations all around the country. Diesel fuel used to be cheaper than gasoline. Why does it cost more than gasoline now? Diesel fuel has been generally higher thangasoline since September 2004. This is due to the increase in demand anddiminished production. Demand fordiesel and other distillates has increased worldwide.Europe, China and theUnited States creating the most demand. The production of diesel has suffered due to thetransition to Ultra Low SulfurDiesel fuel requirements in the United States. Also contributing to the price difference is the Federal excise tax that is 6 cents higher on diesel fuel than gasoline. As countries become more modernized their demand for crude oil increases. In recent years the demand for crude oil has gone up and the supply has gone down creating an increase in the price. The Organization of Petroleum Exporting Countries (OPEC) controls approximately 2/3 of the world's crude oil reserves. OPEC sets a maximum production limit on 40 percent of the world's crude oil reserves. This limit on production will continue to have negative effects on the price of diesel fuel.
Authors Bio:
What will happen to your income if the price of Diesel Fuel goes up. What can we do to change the price of Diesel Fuel
One person has commented on this article. No.1 Untitled Diesel is a waste product that is made when you make gas. Diesel was thrown away for many years. Then sombody figured out it explodes under presure and made an engine to accomidate it. It was like finding out your body waste could power your house so you would stop flushing it down the toilet.
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