It always pays to be prepared with extra fuel on hand. That way, when times get tough, you won’t have to worry about shortages.
One of the most versatile fuels around is kerosene, and even though it isn’t very popular in the US compared to bygone eras, it’s still a reliable and efficient choice for heaters and other appliances.
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But have you checked out the prices at the pump lately? To say they are high and getting higher is an understatement.
It seems anomalous even considering the cruddy economy. So what’s the deal? Why is kerosene so gosh darn expensive?
Kerosene has gotten expensive due to several factors at home and abroad, namely the Ukraine-Russian war, extreme airline industry demand, low wholesaler inventory, generally low domestic use and low overall US production.
Well, it sounds like kerosene has a lot going against it when it comes to pricing, and that’s no exaggeration.
It’s still out there, and you can still get it, but if you’re dependent upon it as part of your overall preparedness plan, you might be advised to bite the bullet and get it now while they’re getting is good.
I have reason to believe that the pinch at the pump is far from over. Keep reading, and we’ll talk more about why kerosene has gotten so pricey…
Ukraine-Russian War
One of the biggest, and certainly one of the most influential, reasons why kerosene has gotten so spendy is because of the war in Ukraine.
Russia should be well known by most readers as being an extremely important global producer of petroleum products, and especially kerosene.
Considering that the sanctions are flying fast and furious on both sides of the war, it only makes sense that Russia’s exports and client nation’s formerly permissive importation of kerosene are being highly affected.
Accordingly, this is leading to a sort of snowball effect as erstwhile suppliers and middlemen are scrambling to obtain enough to fulfill their obligations.
This is, and no uncertain terms, a huge contributor to the energy crisis that much of Europe and, to a degree, the US has been feeling for the past couple of years now.
Considering that domestically here in the US kerosene is no longer a particularly widespread fuel for residential and light commercial use, typical retailers are selling it at a pretty penny.
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In turn, this short supply is exacerbated by…
Airline Industry Demand
Believe it or not, the airline industry uses oceans of kerosene, or rather kerosene derivatives, in the form of aviation fuel.
Yes, they sure do, and in fact the industry’s consumption of kerosene has been increasing rapidly lately.
Now, jet fuel and other aviation fuels make up a great big family of fuels, and there are many different types.
Not all of them can be said to be a kerosene-type fuel, but many are including some of the most common jet fuels in the form of JP5, JP8, Jet A and Jet A-1.
And remember that travel is hardly all there is to the airline industry: Mass cargo transit has continued virtually unabated even during the height of the mysterious viral outbreak of unknown origin a couple of years ago that froze the global economy.
Consider too that much of civilian aircraft operation, at least those using turbine engines, relies on this aviation fuel as well.
All told, this produces drastic strain on already gravely reduced supplies available worldwide and particularly here in the United States. This, as always, is going to drive up the cost.
Wholesaler Inventory is Very Low
So, between the war in Ukraine and the airline industry gobbling up all the kerosene and kerosene derivatives can get its grubby, insatiable hands on, things are bad enough but we’re hardly finished…
Here at home, kerosene wholesaler inventories are frighteningly low.
Naturally, if they aren’t going to have any product to sell to retailers they will find themselves out of business or quickly robbing Peter to pay Paul.
Accordingly, they must maximize their profits in accordance with the law of supply and demand.
This has truly resulted in a survival of the fittest situation when it comes to the sale of kerosene to retailers.
And you know if the retailers have to pay more for it, you are going to pay more for it. “You,” in this case, meaning the public at large.
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And since what little kerosene is being gobbled up readily enough by a starving consumer base, there is no incentive whatsoever for those prices to come down in the meantime.
Low Domestic Use
Overall, kerosene has not been a super important fuel in the United States, not for your average home owning consumer, for quite a long time.
Ever since the end of World War II, the overall use of kerosene at this level of society has been declining.
Most appliances, including water heaters, space heaters, furnaces, and more are either run on electricity or natural gas, not kerosene.
This means that in many regions, particularly the South, Southwest and surprisingly many parts of the Midwest and West Coast, no longer have much call or need for kerosene.
Rather, people that live in suburbia and the city don’t!
For those of us who live out in the boondocks or even completely off-grid, kerosene remains one of the best, most viable fuels owing to its optimal combination of shelf life and performance.
Regrettably, there are now probably only one or pump retailers of kerosene in any given large town nearby for a lot of us.
Those retailers must, of course, justify even stocking a given product and considering kerosene is not likely to be a sales leader, it will be priced accordingly as a more specialized product.
Take that factor, and pile all the other factors we’ve talked about so far on top of it and the stage is set for kerosene that has more than doubled in price in just one year.
Low U.S. Production
And the final cherry on top of the kerosene pricing fiasco sundae is the fact that domestic production of kerosene is just not ramping up.
In fact, it is decreasing, despite airline industry demands and overall consumer thirst for the stuff.
There are just not many US producers of kerosene left, and the ones that are left are producing less of it year to year. And there’s nothing for it.
Why this is remains a mystery, maybe they don’t have the capital, the willpower or maybe they are coasting along on some kind of sweet government subsidy to stay parked right where they are.
In any case, it doesn’t appear there is any relief in sight.
Source: https://t-tees.com
Category: WHY
