Posted by Deere54 on December 15, 2014 at 08:54:55 from (152.119.255.251):
In Reply to: Gas vs Diesel posted by Sourgum on December 14, 2014 at 20:30:15:
Public relations and inelastic diesel demand. Gas prices are highly visible to the general gas-consuming public so the oil companies think they can lower gas prices and thus garner some public good will. Gas is a loss leader. The oil companies' real profit comes from No. 2 (Diesel) fuel, demand for which as others have pointed out is nowhere near as elastic as for gas. Gas goes up, people can cut back some, but there is nowhere much to cut back in No. 2 (diesel) usage. You have to buy your No. 2 to heat your home, work the land, freight transportation etc, no matter what it costs whereas your teenage kid can always skip the trip to the mall if gas is too high.
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