RE:Interesting PricingYes, its a bit of a scam, and consumers are the mark.
Today I paid the equivalent of $CAD 1.30 per litre for 95 Octane here in northern Thailand. Our crude oil comes from Saudi Arabia for the most part, which is a much costlier crude price per bbl than in Canada, then it is refined here. Malaysia has even better fuel, and costs only about 2/3 of what I pay in Thailand. 95 is the lowest octane you can get there, and goes up to 97, adding over 11% to your fuel economy, although it has only 1% more calorific value.
In North America, there are much higher profit margins on premium blends over regular, with only slighly more in costs for the additives involved to make the premium blends.
Diesel is the hammer now, especially in PADD1. With refinery run rates of 93.9% vs 88.6% this time last year, they are trying their best to capture the crack spread as much as they can while inventories are low and are delivering more product to market. Diesel inventories have had slight builds both as a result of more product refined, rebalancing the heating oil/diesel/kerosene jet fuels mix, along with slightly less demand, also there were more imports, less exports due to the arbitrage closing, and the expected heating oil emergency reserve release in PADD1.
The Jones Act is keeping PADD1 from getting more product supply from PADD3. There are few Jones act vessels available, and the exhorbitant costs of them actually make it economically viable to send diesel from the ample supplies in the GOM to Europe, and then send European Diesel to the US east coast. The Jones Act prevents foreign ships or crew from transporting between US ports, and is in place to maintain a healthy US shipping adn shipbuilding industry. Call it a subsidy to the US marine sector.
Canada's Diesel and gasoline prices take their lead from the US wholesale prices, as we do not have an west to east pipeline. So we suffer from the same Jones act stupidity as well. The eastern part of Canada must compete with the Eastern US market, which still has record low diesel inventory levels.
Pump prices are expected to fall slightly more, and they already have in the US last couple weeks.
There is some great insight offered by Patrick on Gasbuddy on Twitter, and Roger McKnight on BNN sometimes regarding the fuels markets.
Wholesale prices are back down to where they were in September, and it seems that it might stay down a while till Jan, unless we have another refinery explode somewhere as they get pushed to the limits.
Here's live RBOB spot gasoline price:
https://www.investing.com/commodities/gasoline-rbob Here's heating oil, can use it for a proxy for diesel:
https://www.investing.com/commodities/heating-oil Experienced wrote: Stopped for a gas fillup today and was scratching my head at the pricing. Perhaps people here can understand this and better yet know how it works. While I was at the pump, I noticed the following pricing...
Regular - 87 octane......140.9 per litre
Mid range - 89 octane....160.9 per litre
High Test - 91 octane......168.9 per litre
Diesel..............................204.9 per litre
Soooo...2 extra bits of octane over regular was another 20 cents a litre but a further 2 extra bits of octane was only another 8 cents a litre. The spread for diesel 64 cents a litre!!