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Old March 5th, 2008, 08:37 AM   #174
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Diesel pricing is strictly a supply side issue. The minimal increase in demand pales in comparison to the supply restrictions in the market. As someone posted a couple posts ago, there is very limited refinery capacity to refine fuels. Diesel, kerosene, jet fuel, and heating oil come from the same refineries. Starting in the fall, you will see diesel prices jump despite no real increase in oil supply prices. It is because refineries are switching to heating oil production, plus the increased cost of winter fuel additives. The price increase is a market force used to decrease demand so that the existing supply will meet demand. There were only a few weeks last year where diesel prices were at or below gasoline prices. Gas prices are much more volatile and subject to political pressure. When considering a diesel, you must consider the total cost of ownership. My Cummins should last 400,000 miles before it needs an overhaul. A gas motor would probably need rebuilt or replaced at 1/3 that mileage. Even with slightly higher fuel prices, I will come out farther ahead with a diesel than if I had gone with a gasser.
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