Comment by largbae
10 hours ago
Diesel is $5 in the Southeast, what kind of supply chain issue could cause 40% diff? Should we hire some tanker trucks and arb this?
10 hours ago
Diesel is $5 in the Southeast, what kind of supply chain issue could cause 40% diff? Should we hire some tanker trucks and arb this?
Most oil production and refining capacity is east of the Rockies and transported to major population centers using pipelines. The Rockies, Sierra Nevada, etc. make pipelines much more cost prohibitive since you have to pump it over the mountains; trains and trucks are a lot more expensive to use for transport; and tankers would have to use the Panama Canal, which besides being a much longer distance also has usage fees.
Check taxes
None. But you don't put a non refined cruide oil in your diesel, it not only has to be refined but DELIVERED to your country. Depending where that country is, delivery could be even 60% of the final price. And when, you know, tankers with oil explode due to drone attacks, you will see quick large spikes in pump price.
EDIT: also, oil is a commodity traded worldwide, and downside of this is the price of oil is directed by future contracts bet on said oil. In other words, if enough people assume there will be future upticks related to raising cost of transportation insurance, they buy more futures. If they buy more of this virtual contract on price going up (called "long") then eventually real price of oil catches up. Sure, this is upside down, but markets live in this setup for many years now where tail wags the dog.