Q: Hey Ace hole, I have an auto with a diesel engine and all’s been lovely ’til recently. Diesel has always been cheaper than gasoline, or about the same as regular. However, lately gasoline has dropped to as low as $1.64 per gallon while diesel is still over $2 at most stations. What gives? Has someone forgotten to set the pumps back?—Donald Pump
A: Come on, Donald, we’re not talking Daylight Savings Time here. But always intrigued by a question involving money and fancy distressed jeans, the intrepid Ace set out to solve this case the only way he knows how: By jumping into the Acemobile and hot-rodding all over Charlottesville in search of tell-all gas station signage.
Now, like Ace, the Acemobile is relatively uncomplicated. Feed it gas and it’ll go. Thus, unaccustomed to seeking out the rare diesel fuel watering hole around town, the search in the Acemobile proved quite an odyssey. However, at long last, Ace pulled into the parking lot of Coastal Goco Oil Company on Harris Street. The sign said it all: $1.73 for regular unleaded, $1.83 for unleaded plus, $1.93 for super unleaded and a whopping, bank-breaking $1.99 for diesel.
Hot on the story’s trail, Ace stormed Goco’s office. There, Ace encountered, like a human holy grail, one Harry Montague, President of Goco Oil Co. Montague had all the simple answers to this question that Ace had feared would be too number-addled for Ace’s creative-type brain.
Montague’s answer, delightfully, was straight out of Adam Smith: Supply and demand, baby, supply and demand. He explained that during the summertime, diesel inventory usually builds up because people aren’t using it as much. So much for “usually.” Last summer, diesel consumption reached a record high (Montague couldn’t cite numbers) and, as a result, there was no surplus of diesel left over for folks to dip into during the long winter months.
“It’s the first time I remember fuel and diesel prices not going down in the summer at all,” he said, also citing fuel sent overseas and a record harvest in the Midwest (which means more diesel consumption) as factors in the case of the disappearing diesel.
As for whether he sees prices going down anytime soon, Montague is not optimistic. He mentioned how OPEC is talking about decreasing production, which is clearly not going to help the situation. All diesel drivers can pray for is that Punxsutawney Phil will grant an early spring and with the warm weather will get people out of their cars, bringing a reprieve in the diesel pricing game.
“It’s been a yo-yo all year,” says Montague. “They change prices on us once a day, sometimes twice a day if the market’s wild. It’s been a roller coaster.” Ace just wonders whether we’re on our way up or on our way down.