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Wednesday, May 10, 2006

Shameless Self-Promotion

Here is my op-ed column from Sunday's Orange County Register on oil profiteering and the Spirit of Brezhnev.


Barry Vanhoff said...

Great piece.

Why have diesel prices gone up as well?

Just curious. I can guess, but don't want to expose too much of my ignorance. :)

Kathy Hutchins said...

Why have diesel prices gone up as well?

1) Demand for diesel is rising, just as gasoline is. (Partially offset by the seasonal switch away from home heating oil, which uses the same fraction of petroleum as diesel).

2) Diesel is refined from crude oil too.

3) There are some tighter sulfur content requirements on petrodiesel that are coming into full force in 2006.

4) Something I do find interesting is that while the price of diesel has risen in absolute terms, it has fallen relative to gasoline. Nine months ago diesel's retail price point was about halfway between 87 and 89 octane gasoline. Now it's a dime cheaper than 87 octane. When I first noticed this I took it as prima facie evidence that the ethanol blending requirements were having that much of an effect on price, since those requirements don't affect diesel, but I haven't actually looked into the matter carefully.

(The exact amounts will probably vary from state to state, because most states tax gasoline and diesel at different rates.)