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Title: Oil Prices Plunged—Why Haven't Airfares and Some Home Energy Bills?
Source: National Geographic
URL Source: http://news.nationalgeographic.com/ ... t-not-airfares-and-some-bills/
Published: Jan 15, 2015
Author: Christina Nunez
Post Date: 2015-01-15 13:40:32 by Willie Green
Keywords: None
Views: 6683
Comments: 21

Low energy prices won't necessarily reduce prices for certain consumers

Now that the price of crude oil has sunk to a six-year low, gasoline is much cheaper, but airfares and some home energy bills still seem head-scratchingly high. Why isn't everyone seeing relief?

The cost of jet fuel, for example, has fallen a whopping 43 percent on average worldwide from the price a year ago. Don't rush just yet, though, to book that flight to Fiji. Airfares have barely budged, and in places such as the U.S. Northeast and the United Kingdom, home bills for electricity and heat are as high as ever.

The stubborn prices are prompting stern words from politicians. "It is curious and confounding that [air] ticket prices are sky-high and defying economic gravity," said New York Senator Chuck Schumer last month, urging a federal investigation.

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Poster Comment:

Evidence that we need high speed rail to provide more competition.

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Begin Trace Mode for Comment # 10.

#1. To: Willie Green (#0)

Why is diesel still a buck a gallon more than gas?

BobCeleste  posted on  2015-01-15   13:42:43 ET  Reply   Untrace   Trace   Private Reply  


#3. To: BobCeleste (#1)

Why is diesel still a buck a gallon more than gas?

That's a good question, Bob. I honestly don't know, but I'm willing to take a wild guess. Maybe it's because the excess oil that they start out with isn't all the same kind of oil. Petroleum pumped from traditional oil wells isn't the same as what they get from processing tar sands or fracking oil shales. So depending on what they start out with, and the design of the refinery, maybe gasoline is simply easier to make than diesel.

But I don't know the first thing about designing refineries, so that guess is probably totally wrong.

Willie Green  posted on  2015-01-15   14:11:21 ET  Reply   Untrace   Trace   Private Reply  


#10. To: Willie Green (#3)

So depending on what they start out with, and the design of the refinery, maybe gasoline is simply easier to make than diesel.

I read an article once that said some wells in Saudi Arabia produce crude oil that is light and volatile enough that it will burn in a diesel without refining.

tpaine  posted on  2015-01-15   21:50:05 ET  Reply   Untrace   Trace   Private Reply  


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