Sky-high diesel price: What gives? (Facts vs conspiracy.) | Auto Expert John Cadogan
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About bloody time someone covered this, and someone without an obvious bias either way too. Thanks.
Sal on what going on in shipping been talking about this for the last two years
I thought the bias was quite clear in this video and somewhat extreme
@@paulg3336 Yes it was.
It's not our governments fault that Russia invaded Ukriane, or that OPEC is starting a economic war on the west.
@@paulg3336 Could you elaborate?
What worries me more than the price of fuel is the lack of fuel security. In Western Australia for example, fuel is imported from Singapore. The BP refinery is being converted to an import only facility. Assuming that we never have a relationship issue along the lines of the then Australian government reacting to a video about a cow, we are only one earthquake away from disaster, as Singapore is on the ring of fire.Or maybe on significant hurricane. It appears that the strategic supply lessons WWII have been forgotten, which is one of the reasons that the original oil refinery was built in WA. Same goes for vehicle manufacturing in Australia. We now lack the ability to mass produce anything during a period of duress.
lesson: Don't ever let a giant company buy your company and take it over. It may possibly kill it at some point. I can see why it seems so attractive to sell out and imagine that the big fish will take care of things (with their big wallets)
We can thank Scumbag Scomo for a lot of these problems
He seemed to have a death wish for aussie manufacturing oil production and anything else that’s useful for a country to run
A bit like selling our electricity production overseas and it can be shut down anytime it becomes unprofitable to operate.
@@TC-yx2ss real smart move
Thanks Liberals!
More like Russia makes the oil, sells it to China, China sells it to Singapore or some other 3rd party then sells it to the west, each step a new mark up.
Hi John. You mentioned my name last night commenting on the cost to refine fuel. I had commented the diesel was cheaper to refine than petrol. You said that was not the case and rather rudely said I was uneducated. I did a little research today and it supports my argument . I am a retired mechanic having spent my entire life working on all sorts of machinery. Many years ago I converted cars to LPG. I had to do a training course and pass an exam to get my license. One of the things I distinctly remember from the course was when they broke down all the products from a barrel of crude. Diesel was right down the bottom. Maybe nowadays diesel and petrol cost similar to refine what with modern cars needing finer fuels and they have additives. However, I stand by my comment that diesel is cheaper to refine. That said I very much enjoyed and was educated about the marketing that affects the cost of fuel. Thank you for a great podcast. Cheers Allan
Allan as far as I'm informed, you are correct in saying that on black and white paper diesel is cheaper to make than petrol, but that's as far as the arguments go.
Thanks to our 'greenies' of the world it is now a lot more closer in cost comparison to produce diesel vs petrol. This is because diesel fuel now has to be completely stripped nude of all it's nasties creating ULSD (ultra-low Sulfar Diesel) in turn taking it a lot longer to process than petrol.
This year a third of all new vehicles sold (I think the ranger being one of the top performers) were all diesel powered. Now add the fact that Diesel is basically the only fuel used in commercial industry I think it's safe to say that as a nation we are heavily reliant on the fuel. It's simply a supply and demand issue.
It's safe to say that the globalist are achieving their goals and we're strongly being pushed towards electric powered machinery.
It depends on the design of the refinery, as to the percentage of each type of refined fuel, diesel, paraffin and petrol. Once built, it’s very expensive to redesign to produce a different percentage of each. However , there are limits on the percentage of each type, right down to ship fuel and asphalt.
@@thats60slife60 I can see one day that the i.c.e may be gone from our roads(but in all reality there's no need for that to happen,but that's anthor whole fuel discussion topic) but i.m.o heavy diesel powered machines & trucks will live on for a long,long time as i don't believe EV powered equipment will be able to do what they do.
You have to take the gas out of the diesel to make it fkn diesel dude. You dont just get one. Whats dictating the cost is manufacturing, refining, mining, farming, commercial transportation, and construction are in full swing. Not to mention an energy crisis in Europe. Demand sets the price.
@@kolinstallman3788 Theresa job for you at Halliburton. They need new refinery designers, not conforming to current thinking.
Diesel is not cheaper than petrol to refine, diesel "purification" when it went to less than 50ppm of Sulphur required the refinery I worked at to build two new Hydrotreaters, not a cheap exercise, as usual you are correct in what you say, it's a fact. You are also "spot on" with your commentary around how the refinery "tweaks" production to cater for seasonal, industrial and human requirements (LPG etc)
It was more than likely about the same or lower until 2006-2007 when ULSD was introduced. When everything started going to the dogs.
Diesel is way cheaper to produce than Gasoline.
@@partymanau why?
@@axelknutt5065 Because he was asleep at the back of the class room.
Sulphur in diesels is fucking nasty stuff due to the combustion process. You don’t want that shit in society
Riddle me this John, 2007 crude price .0594 cpl diesel price 1.331 $pl petrol $1.261 pl, 2008 crude price .8679 cpl diesel 1.631 $pl petrol 1.431 cpl, 2022 ave price crude .6415 cpl diesel 2.35 $pl petrol 2.10 $pl. I did this comparison about 3 months ago based on an average fuel cost, so yes it may have changed.Yes I’d did use a conversion of 158.987 l / barrel. I have no life so if you want the spread sheet I can send it to you, it has a spiking graph showing cost of crude v cost of fuel. Here are some punctuation marks in case you need to insert them above ….??? ,,,,,
And yet prior to Covid when aviation was all the go, diesel wasn’t 60c per litre dearer than petrol 🙄
Many years ago I visited an oil and gas field in SW Queensland. I visited oils wells and various processing facilities over the two days of my visit. My host took me to one oil well (with one of those nodding donkey pumps) that was filling a huge above-ground tank. The operator's job was to drain the water and sand into a huge pond and then contact the 'office' to tell the tanker to come and collect the remainder of the tank. On the side of the tank was a fuel hose and nozzle much like those at a normal service station. To my surprise the operator backed the 4WD up to the pump and proceeded to fill the tank. When I enquired what he was putting in the vehicle and why, he explained that this particular well produced, apart from some water and a bit of sand, pure diesel that required minimal processing at the refinery and was perfectly fine for a tough-as-nails Toyota. Not all 'crude' oil as it comes out of the ground is that thick, black, smelly gooey stuff and a lot of it contains a range of fractions of the various components. I guess the real job of the refinery is to take all these different components and work out how to process the consistent products we all rely on.
I have witnessed this as well
Surprised the hell out of me !
We need a Trump to reopen our oil wells instead of buying in from some other country.
I am keen to se how he do that from prison.
I can't believe that, its fascinating!!!
Sounds like Mereenie.
Hi John…
Long time caller, first time listener here.
This was a cracking high octane episode, straight out of the barrel, likely be a catalyst for refining the audience in motion lotion economics.
High octane is from alkylation, not cracking.
All that needed was an ad for Olight and teeth whitener.
John. I had a good long think about this video as I pumped diesel again for the 3rd time this week.
prior to covid, when air travel was much greater than it is today and trucks were moving more stock than it is at the moment ( supply chain shortages), Diesel was cheaper than petrol. So I think there is something else going on here.
What is happening is a transfer of wealth from the lower and worker classes to the super super elites, the 8500 people who run the world.
An ABC report mentioned the European demand for diesel has greatly increased since the start of the war in the Ukraine. It powers a lot of their energy requirements. This is the number 1 factor driving World diesel prices at the moment.
@@cjlamber our overflowing global reserves from covid have dwindled already? How is this possible? xD
@@cjlamber US today is producing huge diesel production = FOR EXPORT to the EU ... Huge profits >? Profits Hmm funny how the war gets blamed when theres profits to be made ?
@@cjlamber the world price of diesel has nothing to do with it. We import the crude and refine here. The price of fuel is based on the crude price. But the price of diesel should remain the same in relation to petrol. It has never been 70c a litre dearer. It has been a few cents at most but usually cheaper.
Price per litre for diesel today in Levin, N.Z is $2.37-$2.77, 91ron is $2.39-$2.69, has dropped almost $1 since highest. Diesel users have to pay RUC here (road user charges) since it is not taxed at the pump. Not many years ago diesel was much cheaper than petrol.
Diesel in the UK is $3.50!
Yer was always 70/80 cents cheaper. Costco has 2.42 diesel and 2.42 91 this morning
Not many years ago you didn't have cult running your country..
@@holeephuk not much longer
There's a point where I quit my job, it's about $3.50 a litre.
We need a national strike to get this bullshit sorted.
There is one very good reason why diesel is more expensive then petrol. I sold my petrol powered car and bought a diesel powered car. Enough said.
*than. He even mentioned that in the video...
SMH
I needed some humour this evening and you did not fail to deliver. Thank you John.
Dropping the truth bombs, DJ JC! Love your work mate and your no bullshit candor
How’s this for going back to school. Your video has delivered us a lesson in English, Mathematics, Science, History, Economics and Reality all rolled into one. Interesting point about the amount of tax on fuel in Australia being quite low compared to most other countries. Only problem is that it’s a lot further to “Dingo Piss Creek” here than most other countries, so I would assume that we would consume more fuel per capita than most, so big brother is still extracting their fair share from us mortals. John you’re a legend. PS I edited a grammatical error to keep you happy 🤣🤣🤣.
It's funny how people complain about $2.20 a litre but will go a bottle of water and pay $3.00 for 600 mil and nothing mentioned
especially when the same amount of water out of your tap costs less than 1 cent
Brainwashing (advertising) at its finest!
Diesel prices make me sad
The place where I work goes thru 4 B doubles of diesel a day just the keep machines moving and gensets going. There plenty of more place's like this, which can use way more.
I'm guessing you work at the company that rotates the moon around the earth everyday 🤔
@@brad9529 Probably providing a real set of goods or services.....the very same that we will be without when the Greenies and Stop Oil crowd get their way.
If Greenies glue themselves to a road, and a Tesla comes along, do they then use solvents to release the glue and allow the Tesla to pass ?
@@davidnobular9220 well I was just making a joke, but I do agree with your political observation.
It would have to be a plant based solvent 🤣
I work for a civil construction company with probably 40 huge excavators a few dozers …. 5 graders …. and 15 trucks …. $50000 bucks a day on diesel …. It’s incredible to even think about that kind of money
Mate runs a quarry - they use 30,000L of diesel a fortnight , they supply stuff for house slabs and driveways.
Another mate owns a trucking company main contract is Woolies , they use $1.5 million dollars of diesel a month
Taking food to shops , that’s doubled in 6 months
Yes, fuel is very expensive in Europe. Here in the UK, my local fuel station is charging £1.74/litre for 95 RON E10 unleaded (the lowest grade we have), and £1.94/litre for B7 diesel. I only live 17 miles (27 km) from the nearest city, where both petrol and diesel are about 5 pence cheaper per litre.
Truckie and courier drivers have to pass on the fuel increase to their customers and people wonder why the cost of their goods are higher
All goods imported and delivered is by a diesel powered vehicle
Protect the cost of diesel bring down the cost of goods
Very interesting and educational. The explanation of what comes out of a barrel of oil into products was excellent.
Awesome work as usual mate . Matt from New Zealand
I really enjoy your insights into all things car-related, John. In regard to fuel prices in Australia, you mentioned that we've got it pretty good in relation to other OECD nations. I guess the obvious caveat is that not too many of those nations are as large as Australia and as sparsely populated. We often travel vast distances. Even a city-dweller like myself likes to visit a small country property. It's a 300 km round trip and it is now a rather expensive journey. Australia's also not blessed with a fantastic, modern public transport system. Here in Melbourne, we're still waiting for a relatively flat train line from the CBD to the airport. With the cost of pretty much everything rising, and wages stagnating or dropping, paying more than $2.00 a litre for fuel is a bitter pill to swallow for most people.
Thanks John! It’s great laughing while being informed on relavant topics🤙🏼
You're absolutely correct that our modern society owes a lot to petroleum consumption. The problem, however (apart from the impact on climate), is that as we consume the "low hanging fruit" (so to speak), the continued use of these hydrocarbons are going to cost more and more. This was a problem with petroleum use we realized as far back as the 1970's.
Paid $2.59 per litre in Armidale 2 weeks ago and just over $2.30 at BP on Victoria Road yesterday.
Sorry Mr Engineer. Supply demand is the biggest scam in pricing. It is tied to no metric or fixed margin on feedstocks and is just “how much can I gouge these mugs and get away with it”. Running a price formula is typical in chemicals, but for opec related products they set the standard for “we make a fortune” and stick supply demand out the front. Demand is high but they cut production… Just look at refining margins in Australia. Or even shipping. Before pandemic they made 1B. Then all of a sudden 10B. “Demand” should be opposed at all opportunities.
Absolutely correct!
Brilliant work, thank you. 👍👍
Thanks for the explanation, especially the correlation between jet aviation fuel demand and diesel price increase.
Brilliant, thanks so much 👏👏
I learned a lot from this video thank you John.
All I know is the recent increase in the cost of diesel is really hurtin, as an owner of a big ‘ol thirsty 100 series.
Thanks John! Very interesting.
Another great vid John. I’ll take a hit for the team and keep driving my ICE car so the petrol doesn’t just sit there being wasted.
Driving a rotary powered car, I am doing my bit to keep petrol stocks in Europe low.
Me too
The things we do !!!
to be clear I think the whole electric car things a little overrated, but just because we need oil for things other than fuel doesn't mean the petrol itself will be wasted, we will still need avgas and we'll still need jet fuel and modern refineries can turn almost any part of crude oil into anything else they need for the most part, it's hard to make heavier stuff, for example bunker fuel.... but Diesel and gas are fairly easy and the derivatives, fairly easy being relative it's always easier to break something up than to combine, but I digress
@@jaykoerner Bullshit, get a clue
@@jaykoerner It would be nice, going forward, to understand what the implications are of going fully EV. If for example, you need to refine 2 barrels of crude to make the lubricants/plastics/rubber for an EV. The other waste products, now that planes are hydrogen fuelled (don't laugh), will have to go somewhere unless you can tune the refining process not to make them. Which I very much doubt. Do we count this waste as part of the non-green effect of going purely EV? And it is not just car production that needs refined chemicals from crude. The other things crude is used for are highly subsidised buy the need for oils, petrol (gas), diesel and aviation fuels.
You didn’t actually say why diesel is 50-70 cents dearer than unleaded compared to a couple of years ago
If you can somehow endure the insufferable ads at the beginning of this video, you'll be rewarded. Fantastic explanation and it's refreshing to see there are still some out there with literacy standards and a great sense of humour. Great work.
When fractioning crude oil, you need 150deg C to take off the base product for petrol, whereas you get diesel base fluid at 300 deg C. You use twice as much energy to make diesel as you do to make petrol. I know it is not as simple as it looks, but that basic fact is a factor. The base fluid for Jet A and Kerosene comes off at 200 deg C.
Laughed my arse off "unsufferable green twat"
Just amazing, well done for saying that ! 👏
What is the difference between gasoline, kerosene, diesel fuel, etc.?
The "crude oil" pumped out of the ground is a black liquid called petroleum. This liquid contains aliphatic hydrocarbons, or hydrocarbons composed of nothing but hydrogen and carbon. The carbon atoms link together in chains of different lengths.
It turns out that hydrocarbon molecules of different lengths have different properties and behaviors. For example, a chain with just one carbon atom in it (CH4) is the lightest chain, known as methane. Methane is a gas so light that it floats like helium. As the chains get longer, they get heavier.
The first four chains -- CH4 (methane), C2H6 (ethane), C3H8 (propane) and C4H10 (butane) -- are all gases, and they boil at -161, -88, -46 and -1 degrees F, respectively (-107, -67, -43 and -18 degrees C). The chains up through C18H32 or so are all liquids at room temperature, and the chains above C19 are all solids at room temperature.
The different chain lengths have progressively higher boiling points, so they can be separated out by distillation. This is what happens in an oil refinery -- crude oil is heated and the different chains are pulled out by their vaporization temperatures.
The chains in the C5, C6 and C7 range are all very light, easily vaporized, clear liquids called naphthas. They are used as solvents -- dry cleaning fluids can be made from these liquids, as well as paint solvents and other quick-drying products.
The chains from C7H16 through C11H24 are blended together and used for gasoline. All of them vaporize at temperatures below the boiling point of water. That's why if you spill gasoline on the ground it evaporates very quickly.
Next is kerosene, in the C12 to C15 range, followed by diesel fuel and heavier fuel oils (like heating oil for houses).
Next come the lubricating oils. These oils no longer vaporize in any way at normal temperatures. For example, engine oil can run all day at 250 degrees F (121 degrees C) without vaporizing at all. Oils go from very light (like 3-in-1 oil) through various thicknesses of motor oil through very thick gear oils and then semi-solid greases. Vasoline falls in there as well.
Chains above the C20 range form solids, starting with paraffin wax, then tar and finally asphaltic bitumen, which used to make asphalt roads.
All of these different substances come from crude oil. The only difference is the length of the carbon chains!
Thank you for such an easy to understand break down of the process.
Thank you.
Corrected a lot of misinformation that had previously been the basis for my understanding of the process of oil refinement.
Always a pleasure. Thank you.
Thanks John. A very pertinent question at the end.
My question to you though - Where are the ming mols and why have you stopped including them?
The ming mols distract me sometimes, but in a nice way☺
That wasn't the case in 2019 and before.
Diesel used to be more expensive than 91 yes, by a small margin, and definitely less than 95 and 98.
Now it's the most expensive fuel.
People bought diesel engine SUV over V6's to save a bit of money.
But now it's the same if not even more economical to have a an SUV with a turbo petrol or a V6.
I am currently getting an average of 10.5L/100 kays on my diesel Santa Fe
That's like $25 per 100 kilometres
Sell your Santa Fe, my old 1995 4.2ltr turbo diesel does better then that.
@@aaronhunter5829 it's already on sale & I'm looking to get something with a V6
I have a 95 camry , saves wear and tear on my diesel 4x4
John FYI .An ellipsis is a set of three periods (or dots) that indicates the omission of words from quoted material, hesitation, or trailing off in dialogue or train of thought. I thought you would know that.
I do know that, thanks. I've worked as a proofreader... (Finishes with an ellipsis - yessssssss!)
Great video, thanks for explaining 👍
I like what you have to say and most of the time you are correct, however with all your explanations you missed one important point. The record revenue our oil companies are making since the covid/ukraine issues. If things are so expensive they shouldn't make those record profits. How do you explain this? Looking forward to your explanation.
There is a difference between revenue and profit. If both their costs and revenue increase by 20% their profit hasn't changed. And with inflation its buying power would have actually gone down
We didn't have this problem prior to the cut in fuel excise. That's when this problem started. They barely dropped the fuel price when the excise dropped. Petrol kept dropping. never ever ever has diesel been so much more expensive than petrol.
That's why I think this guy is talking shit.
YES, THIS COMMENT 👌👌👌
Thank you for that, most informative. I certainly learnt a lot about Oil and you dispelled a few of the myths I too believed.
Thanks John. I especially enjoyed your refining of one barrel of Crude Oil.
Good useful information but somebody is laughing all the way to the bank. It pisses me off that the MSM have failed to do any journalism on who is getting all the extra money being paid and why. If you own an oil well or refinery I guess you'd be thrilled with the price hikes.
John, why was diesel around the same price as petrol pre Covid? We were travelling on planes back then. What has changed to cause the big price differential now? I don’t believe you have answered this question.
Exactly!
Supply.
Thanks John for pointing out we are the 4th lowest taxed on Unleaded Petrol 91 , Please bare in mind at 45 cents per litre we are being slugged roughly $34.00 per barrel . For many years I was one of those thwacks that used to winged and wine about how they can justify the cost of a fill of a 4 cylinder car equalling a barrel of crude oil without being educated until I have recently watch a couple of You Tube videos on the subject. Yours included and thanks for the education on it. As a child, My dad used to run his own trucking business and we would have a 44 gallon drum with the words 205 litre of oil on it. That was my understanding of in the first place before even understanding the crude oil price.
who cares
@@grimreaper6112 About what?
Now it all makes sense to me.
Thank you.
Thanks for that. I was wondering WHY recently. It would make things worse with all the extra Diesel passenger cars now on the road. At least my bike aren't Diesel.
Great info, however I must be missing something. The question was basically, diesel and petrol used to be fairly close in price, now they are miles apart, why? I'm still not sure why the diesel price is diverging from the norm.
Because they don’t want you buying dirty diesels anymore
I liked your final point JC. Very valid question.
AntHill, brought back the memory of the Antz Pants adds "Sick'em Rex !"
Thanks legend, answered a lot of questions I have.
Question for you. If over the lifespan of a vehicle it does X environmental damage, what percentage is manufacture?
I've heard that figure is over half but I have no idea. Maybe you could shed some light
With the current "we all need to be driving electric cars" how does scrapping and recycling the 20.1 million registered vehicles and the manufacturing 20.1 million new vehicles save the world?
Surely one factor in diesel cost diff is that so many 'consumer' cars are now diesel utes so that demand is competing with industry demand and making petrol demand softer. And since the biggest portion of crude is petrol not diesel that also surely plays into the cost. Great video as usual John and I loved the mic drop at end as that exact thought had been going through my mind. I still want an EV one day though.
Why does "demand" increase the price? Does "demand" increase the cost of production,
handling etc?
Or is it simply an excuse for price gouging by the monopolies that hold us to ransom?
@@ivanolsen8596 why does demand increase price??? 🤔
@@rjbiker66 Funny, I thought that was the question I asked.
@@ivanolsen8596 supply and demand.
@@ivanolsen8596 The demand exceed supply there is going to be someone out there who will simply buy the product at "higher price". For example when scalper took hyped $200 Nike, there will be someone in the market who will buy the shoes for $500 as long as he get his hands on it, make the number of that "someone" big enough you'll have the Nike shoe stays at $500 even though it originally retails for $200.
YESSS!!! I was going to email you and request your input on this issue. I paid $2.79 a L for diesel at the end of the road and dingo piss (Gordon) dam wall in Tasmania this week
Educated me on a few points there mate 👍🏻 Thanks that was interesting
A jet engine will run just fine on petrol or diesel as long as it does not freeze at altitude.
UAE , 98 premium unleaded 61 cents/litre , Diesel 16 cents/litre.
Yep ....proves the "diesel Is more expensive to refine" as fake news.
@@marcusbarnes5929 transport and storage must be a profit killer for them !
I can remember a little further back than yesterday, diesel was far cheaper than petrol for many years. It couldn't possibly have anything to do with the fact we have no decent oil refineries left in Australia, or our previous governments selling out our fuel security to overseas entities, with crude word price being much the same as 2013, and less than 2008, the figure don't add up. US residents are paying an equivalent of $2.05AUD per liter or $5.00 USD per gallon
Spot on. I was told by an old engineer mate who worked for Shell, that diesel and jet fuel demand is known to the drop. Gasoline is the by-product and ( back when he told me) refineries pump out excess gasoline to get the diesel they need (as you said, they get more gas from a barrel than diesel),hence why is is cheap. They need to free up the tanks. Anyway, it made sense at the time.
I have never had a reply back from an EV person about what we are going to do with the 'waste,' such as petrol and diesel, when the sale of new ICE is finally banned. I'm sure the decline of ICE cars will be slow, but there seems to be a need for some oil to be refined and unless we can change the way the process is done, they might have to give the stuff away, petrol that is, to us diehard petrol heads.
I’ve got an idea. Pump the liquid back in to the hole it came out of to liberate even more black gold. Right now the drillers are using some kind of technical slime
@@theairstig9164 how do you stop them mixing?
@@theairstig9164 better question: what will we ever do without cheap plastic that inevitably breaks apart or gives us single-use container of food and then takes up the landfill space? Or how about this one: how will I survive without my iPhone or a Boeing 777? Hmmmmm!🤔Yes how will we ever survive???? 😮
It’s simple …
They don’t have the answers
Just like they are more than happy to charge off coal fired power and claim to be green
To cross the Nullarbor, they are happy to have a small truck follow them with a diesel genset on board so they can re-change…
And still claim they are green…
What a F**king joke
I understand your explanation was heavily simplified, but refineries can convert the different distillations either by breaking up and cracking molecules to make lighter stuff combining them to make heavier products, a modern refinery can basically use the entire barrel to make whatever they want for the most part it will affect the costs but they can develop whatever they want out of it, obviously it's cheaper to just go with whatever normally distills out of a barrel though, this is old technology it's been possible since before the 50s
Somewhat true , but an exaggerated perspective . Most existing refineries built to manage specific crudes … new refineries can do lots more … but whose building a new refinery at $5 billion ??? … not in Australia and not really anywhere after Reliance in India
@@alanbartram3147 we are spending more then that on solar and EV's
@@jaykoerner Probably so, but not really relevant. We are never going build another refinery in Australia, and my point is that price differences between fuels are significantlly determined outside of Australia by international supply and demand.
@@alanbartram3147 so what are we going to do with the petrol and the rest? I assume either it will be shipped off or pumped right back into the Earth, Australia doesn't have to build a new refinery someone else can do it, I don't even live in Australia, so it doesn't matter to me
We're the only nation that has price cycles based on absolute price gouging. Price per barrel counts for nothing.
Bloody great video this John .... and as you say, UK double whammy of fuel duty + VAT, yep, 2 taxes on our fuel, hence we are shafted twice when filling up!
Yes indeed, my favourite market, ye olde oil. Price is indeed a function of supply and demand in any market, with some pre cursors. Diesel currently at a 50 cents per litre spread to unleaded 91 and one of the big drivers of that spread at the moment is the lack of gas in Europe, or has been the lack of gas in Europe, so diesel has been moving to that market paying that premium to heat its people. Interesting this morning that Europe's gas storages are now at approx 100% full so will the diesel to petrol spread shrink? Hard to say as Europe shuttered alot of industry, fertilizer and the like based around gas shortages brought on by the war. They may be nervous to re open anything with the conflict still ongoing. With OPEC announcing production cuts a week or so ago (supply control) the price of a barrel jumped about US$8 (AUD12.90) in two nights of trading but has now returned to pre announcement levels based around recessionary fears (demand). The world is an interesting place at this point in time. The US is also well below long term averages on distillate (kerosene and diesel) inventories so this will also feed the complex, as will that aforementioned northern winter and the need for heating oils, which distillates are a part of, the heating oil complex. There are also multiple grades of crude oil, from very heavy (ex Iran) to what we know as light sweet (easiest to refine and would run on its own in some engines). Certain refineries can only refine certain grades of oil. There has been limited money spent on refining infrastructure for a long time, the oil game isn't going to get any more friendly any time soon. The Aussie dollar is also very weak, bit of an upswing at the moment, but it makes a big difference. While retail prices are what we pay, for stable numbers (take the cycles out) I only look at the price per barrel of West Texas Intermediate and wholesale or terminal gate prices here in Aus, which is basically ex wharf port of choice minimum purchase of 40000 litres, to give me benchmarks. All this stuff is readily available on the www. Ocean freight has also been prohibitively expensive, more so on the container front (see Baltic Sea Index) but has moved down sharply, as has container traffic, in recent months. Also remember that there are 3 legs to a price, futures (pricing), basis (the where, freight basically) and currency. You can buy and sell any leg independently (hedging) depending on your opinion of the current or future market. Also, don't get your fuel pricing info from shows like Sunrise or the like. I generally only watch Sunrise when I am forced to, like in the colonoscopy waiting room, where I am unable to find a remote, but now in semi retirement it is playing insidiously in the background here all the time. This morning's clap trap on fuel prices (get out and fill up now or you will never be able to afford fuel again, prices skyrocketing) (in other media as well) made me want to throw things at the screen. I went and searched capital city prices and could not find a single price that they were saying was currently being charged in Adelaide, can do amazing things with old footage and a little bit of emotive language. (I keep coming back and editing, apologies)
He has completely missed the point the actual companies profits have often double check their results
Supply and demand. Don’t hate the oil companies for making a profit. Without tax concessions for research and well development they would run at a loss and we would be sitting naked in the dark
The oil companies are now making bank like profits.
@@ivanolsen8596 Most countries in the world are in the same cartel so they all put the prices up together
@@pauldavies6037 That does not make it OK, I was under the obviously
mistaken belief that price collusion, fixing, was illegal.
I guess in the relentless persuit of profits anything goes, no matter who or
what gets damaged, maimed or bankrupted in the process.
Thanks John a man talking common sense. I wished there was some in government like you
More please . Thank you.
That by product argument is one I've been having for years now with EV-angelists.
To add one more arrow to the quiver, EV's are actually harder on the road surface for inducing wear than conventional IC cars, so the roads
will need to be re surfaced more frequently as the numbers shift.
How do they plan to manufacture asphalt without oil? Pave the roads with spent lithium maybe?
Pave the roads with all the recycling rubbish left behind when these evangelist jokes get thrown away
Some bitumen will still be made in the process of refining crude into lubricants.
Roads can also be built from concrete. Doing this has its downsides (more noise, need for expansion joints, higher CO2 emissions etc) but it's quite possible.
@@nerd1000ify Have you driven on concrete roads in the US? They're noisy and offer less traction than asphalt, and they cost a lot more, both to repair and maintain.
There are advantages in lifespan, but there's an awful lot of roadways...
Also, if the bitumen was created as a dedicated product from oil, the cost would be about 50X what is is currently, as a byproduct. I'm sure EV owners would love to absorb 50 million dollars per lane km after 2030. Memories of petrol really will be 'those good old days'
@@alasdair4161 I have driven on concrete roads (in Australia) and I agree they are loud, though nowhere near as bad as chipseal.
Do take note that bitumen is used in roads precisely because it is very cheap. Its good properties for the job are a sort of happy accident. Ultimately the oil will run out and we'll need an alternative either way.
There are measures that can be taken to 'extend' bitumen with other waste products like shredded tyres and plastic bags. I assume we'll see more of these in the near future as oil production begins to decline. But we'll be extracting oil for long after we've stopped burning it. Mostly for lubricants and chemical feedstocks.
Isn't bitumen one of the most highly recycled products in the world though? yeah you will always need to add virgin product. But bitumen is highly recycled. That is also a reason why we should burn less oil, so we can have these products that depend highly on oil as a feedstock.
Thanks for 'breaking it down' John. Was curious as to why diesel was significantly higher than petrol when filling up this week, now I have half an idea. 🙂
@@Renegade040 that does sound a little too simple....
@@Renegade040 as has been spoken about diesel is seen as an industry fuel. When inflation rises so does the cost of goods and services, of which many rely on diesel use. I can understand it being seen as price-gouging but I think there are many other factors at play as well.
Brilliant explanation!
in the UK there is a move to stockpile diesel due to the potential electric power cuts forecast for this winter, the reasoning being that there will be a need to run diesel generators to run companies, eg banks, data centers. UK electric for the grid may be mostly produced by burning gas but when it comes to local businesses they tend to use diesel generators.
For those of you who usually fast forward the advertising.. DON’T DO IT TODAY! You’ll miss a middle aged man sporting waxed legs, purple socks, and thongs (and that’s not a euphemism). Ha ha. Love ya work John. 😂
I am Loving my 2005 LPG dual cab Ford at the moment, $60 a week cheaper to run down here in Victoria as a daily then a Brand new stock Ranger. I use to get shit for owning an LPG Dual Cab consistently getting told "Gas is for BBQs" now I get to say Diesel is for Freight and agriculture
Paying $1.29 a liter for my LPG auto gas ford Ute being sitting on that for over 6 months northern nsw here ✌️😅
My son drives a 3.8 litre, six-cylinder Commodore on LPG. It costs him as much to run as my old 1.6 litre Civic.
@@davidwade6164 EcoLpi Ford ute here: Brisbane. $1.06 to $1.09 in the west of the city, but I have seen it at one outlet to the north of the city at 95c. I would go the 95c all the time if wasn't so far away from my home in the west..
@@railtrolley a bit far for me as I live in lismore nsw 😅
@@davidwade6164 I done the maths and to be the same $ per kilometres as a TD LPG will have to be about 1.35 a litre, currently where I am it is .98cents and once a month I have to drive to Melbourne where I can fill up as low as .79 cents.
I am old enough to remember when the subsidy was dropped from Diesel. Which wasn't that long ago.
Thank You !!
Also, I assume EV systems must be lubricated with wind. John, would you please comment on this amazing new tech.
EVs are amazing. They are maintenance free apparently. Truly zero cost if you believe the hype
@@JimBob-vb8oz You are heading in the right direction but with a bit of exaggeration. And Joel, a good part of an Ev is resourced from oil, from the reduction gear/differential onwards, they're pretty much the same as any other car.
love how teens sit on roads with stop oil signs... whilst wearing clothes made from oil. sneakers made from oil. hairproducts made from oil. phones made from oil. etc etc etc
STOP (inappropriate use of) OIL
@@nerd1000ify and what is apropriat? do you need your phone? or that synthetic tshirt. do you need to fly.. or must you drive? or take a bus .. can you paint your house? what is apprpriat.. and please be someone who works for a living needing to get mortgage paid. put child through school. keep the cat fed etc. not sommeone living at home paying for nothing and thinking this is normal life so lets stop oil and see what happens
You are not supposed to notice that.
@@sadev101 my point is that oil is probably better used for lubricants and synthetic materials than fuel. It is a finite resource after all, burn it and you don't get it back. That being said, Rome wasn't built in a day, and I'll continue driving my diesel car until a better alternative is within reach.
Nice Thanks for the video Mate 👍
Perfect commentary as usual and expected..
Big fan
Interested to see the hard data on diesel ute and SUV sales. I believe it was somewhere in the vicinity of 33% last year. If that is the case we have booming transport industries (diesel) booming air travel again (jet fuel impacting diesel) and a bunch of humans buying diesel chugging bricks and complaining. Same humans went from purchasing quite fuel efficient petrol powered cheap hatchbacks, then wanted to sit higher to see traffic better or some other stupid reason so the compact SUV was born that cost more and used more petrol. Car manufacturers then released diesel variants to keep the masses happy but alas we wanted more. Same humans then go and buy the diesel brick (ute) and wreck it with all the mod cons they don't need to make it even less fuel efficient than it was previously and complain about the cost of fuel. So it seems the answer for many is now lets buy electric cars yay and let's burn coal instead. If demand dictates price (above costs and margin) then diesel and EV will be and remain ludicrously expensive so the budget consumer sticks with the petrol power.
A sanitised version of this breakdown would make a great science module for our schools John !
Ffs, why do we have to sanitise everything these days?
"Anthill Inside" was (Sir) Terry Pratchett's play on "Intel inside" which "appeared" on Hex, Unseen University's first try at a computer.
Todays price WTI Crude US$85.11 or Au$134.649 A standard US 42-gallon crude oil barrel contains approximately US 45 gallons of salable refined crude oil products per barrel. A tick under 159L. With very little waste the oil companies must be making a fortune!
Hey John, at the risk of being a pedant or perhaps even wrong "cast Iron" actually has a higher carbon content than even high carbon steel. If my memory of trade school doesn't fail me cast iron is a bit like radiators in cars, by that I mean it's a misleading name. Cast Iron is produced and used becuase the very high carbon content lowers it's melting point sufficently to make it ammenable to being cast relatively easily. As modern steel production (modern as in late 60s and onwards) allows for more easy control over exact carbon content in steel cast iron was used less for less brittle grades of steel with a lower carbon content. My understanding is that cast iron is actually a form of steel and true pure iron isn't used or produced except for specific use cases like ferrite cores for transformers and the like.
Also whilst I support excessive consumption being reduced in any and all ways possible, I find the particular focus on oil frustrating. Coal is far far worse in terms of both CO2 and other pollutants like heavy metals and ash and methane in natural gas is possibly just as bad as black coal when you factor in fugitive emissions. I also have serious reservations about BEVs and infastructure. I live at the end of line powerwise and almost everyone in the street has EVs and or Solar and our power supply is very unstable. I put an osciloscope to the mains and both the voltage and frequncy varies a concerning amount with blackouts and brownouts being fairly common I had to upgrade the PSU in my home server and home desktops as the cheap unit I had blew up and took the whole system with it.
no need to worry about methane its a scam, since it oxidizes so easily in the atmosphere it will never go any higher, its why its ppb instead of ppm..
On which planet is diesel 70c dearer than unleaded?
Melbourne. I saw 64c difference today, close enough.
@@stewy2909 I'm sorry stewy you are just not mature enough to understand the term.
Planet Steve.
I love your caravan explanation
When I worked for one of the Big 4 turtle killers a few years ago when the HO traders got hold of a tanker or two of the D from an overseas refinery the local subsidiaries in Oz, Africa etc then had to outbid each other to get a hold of it, in order to satisfy the insatiable demands of the netball sponsors.... HO was raking it in and your Ford Ranger is just collateral damage
Mate of mine who has a large company building Buses and Trucks, told me couple of weeks ago that the day Diesel costs more than 91 Petrol is the day the world ends!
Due companies with no clauses in contracts to increase prices due increase in Diesel prices.
Delivery, Couriers etc will have their margins destroyed by Diesel prices. Reducing their margins to the point where many will simply fold.
And as it is now, things take an age to get anywhere in Middle Earth.
Mate took 2 weeks to get a 5kg box to a mate of his in Christchurch in South Island from our place, Tauranga in North Island.
It's a 1 hr 45 min flight. Wee distance yes, but hardly Moscow!
There's just not the number of trucks going back and forth around NZ.
Diesel is today up to 40 cents dearer than 91 in NZ.
$2.29 v $2.69.
The way things look, the big D is going to be easily well dearer than 91 as we drive down the road!
And for those that didn't know, Jet A that powers turboprop & turbofan (jet) aircraft is a version of Diesel with heaps more chemicals.
It's price is mad. Meaning your flight is madly expensive!
NZ's tax on petrol is one of the world's highest. Government dropped it back due Covid. But the reduced rate ends at end of Jan 23.
This is an interesting graphic of what can be used from a barrel of Oil.
www.visualcapitalist.com/can-made-one-barrel-oil/
Same here in murica. We think (and did) we stole all the oil in the world. Still mad expensive. Wonder why? lol
Less refined...higher price. Gouging.....no😏
Sorry, just a fact !
Thanks John, I was wondering about this.
G’day John. Just one thing, it’s not asphalt that comes out of crude, it’s bitumen. Bitumen is an ingredient in the production of asphalt. There’s many variants of bitumen that are used to seal roads with most having rubber added. The main bitumen grade used in Australia for asphalt production is C320.
Cheers, Dan
Agreed. Correct. Sorry.
Let's cut the BS. 17 mins and still didn't get to the bottom of the issue. Gas turbines in power stations can also run on low sulphur diesel in the event of a disruption to the gas supply. Western sanctions of restrictions on Russian gas supplies has caused an increase in demand for diesel for energy, primarily in Europe, which increases the global price of diesel also. Inflation from crazy, nonsensical Covid spending caused some price increases prior to Ukraine conflict but the extensive uptick in fuel prices has been due to a disruption in supply from another nonsensical government policy if sanctions on energy. The primary sanction has been on gas - in order to keep the 'lights on' these gas requirements have been substituted with diesel which is why there has been a large increase in diesel prices over petrol.
The percentage of Diesel from Russia is only 1.2%
And the majority of power stations in Australia are coal fired, no Power stations here run on Diesel
@@tonyhadenough2574 it's not about the diesel from Russia and it's not about Australia. It's priced internationally.
Nice gay t-shirt John!!!!
Did you find it in a turkish Leopard tank?
In a blown up Russian tank. Sent down under by captured Iranian drone, using a moped motor! 😅😅😅
@@labourlawact7826 fantastic. Making good use of resources!!
@@ghs7714 Yeah, saving the planet😅
September 2004 , in the US diesel transitioned to ultra low sulphur product, production and distribution costs increased and additionally no high capacity refinery has been built here in 40 years, mostly due to "not in my backyard" activism. You add sanctions to Russia, what do you get? now US diesel inventory is at historically low 25 days worth of stock pile. So there's a reason for everything, just people don't like it when their voting tendencies crashes with their milk and eggs prices. Don't know if this applies to Australia, but my guess is, probably!
Very well said!👍👍👍👍👍