Diesel fuel is one of the most important commodities on the economic landscape. The reason for this is that the transportation used in almost all aspects of the economy is fueled by diesel engines. Rising diesel fuel prices usually translate to rising costs of products and services. In order to know what can be done to slow down this increase, you as a consumer need to understand its causes.
Elements of Worth
There are several basic elements that determine the worth of a gallon of diesel. About sixty percent of the cost of diesel reflects the price of crude oil, which is raw material for diesel production. Crude oil is purchased from oil producing countries and subsequently brought to refineries where the ultra-low sulfur diesel, among other petroleum products, is extracted. Given a barrel of crude, a refinery will be able to distill about one tenth of a barrel of diesel. Refining accounts for nearly twenty percent of diesel fuel cost.
The remaining elements of the cost of diesel fuel are government taxes and the expense of marketing and distribution. A ten percent excise tax is levied onto all fuel products that are manufactured in the country. Although...
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