Just a random musing. As EV’s become more popular, means less gas being used, means potentially lower prices since supply of gas should increase? Or do they just cut production and keep prices the same.

Wondering what will happen in the long term.

  • kmosiman@alien.topBEnglish
    1·
    1 year ago

    It’s complicated to NO.

    Peak gasoline consumption may have been in 2018. Gasoline demand will probably only continue to decrease from here on out.

    That doesn’t mean that Gasoline supply will stay the same though. Refineries will be adjusted to make more of other products. In the short term, gas prices may drop because of over supply, but then supply will be cut.

    As supply goes down we will eventually reach a point where gas becomes a niche product and it costs more again because it’s rare.

    • toado3@alien.topBEnglish
      1·
      1 year ago

      Definitely a lot of factors that will come in to play:

      1. Less demand for gas puts downward pressure on price.

      2. Gas stations have fewer customers. That means many will close. The ones that are open will need to charge a higher profit margin per gallon to stay in business (and will get it due to less competition). Fewer gas stations means that per gallon distribution costs will increase as it’s more expensive (per gallon) to distribute to 2 stations in a region then 10.

      3. There are a lot of fixed costs and economies of scale in refining crude oil. With less gas being made, fixed cost per gallon will increase.

      4. In long run, producers will reduce crude supply which will also keep price up.

      My view is the net will be significant cost increase for a gallon of gas. Of the price paid, a higher percentage will go to the gas station, refinery; distributor; etc all due to higher relative costs per gallon.

    • markydsade@alien.topBEnglish
      1·
      1 year ago

      Oil production rises and falls due to price/barrel and anticipated demand. Extraction is not free. Some places it’s not profitable to pump unless it’s a certain price, which in turn eventually lowers the price, which decreases production. Eventually demand will stay too low for the harder oil to be worth extracting.

      Oil will be used in large quantities for a long time. Plastic still needs it. Huge parts of the world don’t have an electric infrastructure to support DCFC which means ICE vehicles will be needed for most of this century barring some newer technologies in decentralized electricity production.

    • marli3@alien.topBEnglish
      1·
      1 year ago

      you need to also remember the petrol: diesel car ratio has also gone through the roof.

      diesel used to be cheap as is was a by-product of the first run petrol process.

      it was pushed in Europe as Europe had not have much oil but lots off refining.(ironicly i think only diesle russia was the main refined import)

      re-cracking diesel into something else is going to push up refining costs.