I was pondering the fact that we normally discuss gasoline prices more than diesel prices on this forum.

Maybe we should spend more time periodically watching diesel prices as it may be a better leading indicator of a possible supply-demand crunch in certain geographies. The recent shutdown of half of Prudhoe Bay really affects the West Coast of the US as this geographic area is severely pipeline-constrained from receiving crude overland from the GoM.   From this Platts link:

----------------------------
The International Energy Agency said August 11 the shutdown of Alaska's
Prudhoe Bay output creates crude quality issues that could be a concern for
the currently constrained global refining sector.

    "Crude quality issues are more of a concern than volumetric outages," the
agency said in its monthly report.

     "In the case of BP's Prudhoe Bay, the crude lost is medium sour and
possible replacements from Saudi Arabia are likely to be sourer," said IEA.
"But this crude could be blended and will be processed by sophisticated West
Coast refineries with more flexibility to remove sulphur than refiners who
typically rely on Nigerian light sweet crudes.

According to the IEA, recent data indicates West Coast refiners are
importing crude from such countries as Angola, Argentina, Iraq, Oman, Saudi
Arabia and Yemen. But, it added, "the transit time from many of these
locations suggest refiners are likely to need to draw on stocks by late August
if already-on-sea cargoes cannot be diverted."

     BP said August 11 it has bought more than 4.5 million barrels of crude on
the global market to help cover its Prudhoe Bay shortfall, with further oil
and products to be bought as necessary. The crude is coming from West Africa,
South America, Asia and the Middle East, said a source.
----------------------------------------------

Consider that California Gasoline only went up two cents in the past week, but Diesel just jumped $0.23 in the past week.  Is this an early indication of what lies shortly ahead for the West Coast gasoline consumer, or can it be delayed till after the November elections?  Is the Governator and CA oil companies hoping to delay future rampant gasoline price increases as far as possible into the upcoming election cycle?  If it takes a long time for that sour crude to arrive and be processed, your average pissed-off voters won't be in any mood to study Peakoil and the West Coast's oil infrastructure!

Consider that most diesel burned in this country is used for commercial and farming purposes--these people don't joyride, but watch their fuel costs very closely.  Contrast this with a lot of our gasoline use and one can clearly see that diesel demand inelasticity is much more tightly constrained than our gasoline demand inelasticity.  Diesel demand also has alot less seasonal variation than gasoline too.  This link on California petroleum is excellent info [pdf warning].

The other consideration is that over time it will be alot easier to improve gasoline mpg than diesel mpg.  People can switch much faster to higher mpg cars, car-pooling, mass-transit, scooters/motorcycles, bicycles, etc versus a big-rig hauling our goods or a tractor trying to plow a field.  In short, you can't carpool two semi-trailer loads into one trailer.  This diesel equipment generally costs alot more initially so they need to get the full use and depreciation out of it before they can trade up to a more efficient replacement.  The diesel problem is: how much more efficient can you make a bulldozer, diesel locomotive, or a diesel powered fishing boat?  Most diesel vehicles really work, versus most gasoline vehicles cruising with hardly any load [like the one person/car commuter mode so popular in the US].

So logically, the price of diesel/gallon should increase less than the price increase of gasoline/gallon.   But we need to remember that people vote, not corporations.  But companies can pass off their rising costs to the end-user, and most of us are unaware that this corporate method is the most powerful vote of all.

From this Energy California Govt. webpage  we can see that CA refineries turn 51.4% of a barrel of crude into gasoline, but only 15.3% into distallate/diesel.  If refinery processing problems from late and heavy, sour shipments can be publicly hidden or delayed by decreasing diesel production and keeping gasoline production up-- it benefits both the IOCs and the Governator by keeping the easy-motoring, drive thru, laidback CA voter uninformed for as long as possible.  Thus, it takes longer for diesel fuel costs to work their way into the price of consumer goods versus the immediate consumer outrage of high gasoline prices.

Bob Shaw in Phx,Az   Are Humans Smarter than Yeast?