Why is Diesel Fuel More Expensive Than Gasoline? 8 Facts & Overview

Diesel fuel costs more than gasoline. But if you look at the reasons why diesel fuel costs more than gasoline, you’ll find a good explanation of why diesel fuel costs more than gasoline.

Why is Diesel Fuel More Expensive Than Gasoline?

Diesel fuel, which is often used in commercial trucks, has not always been more expensive than regular gasoline. Diesel fuel is a less refined distillate of petroleum than gasoline, hence diesel fuel should always be cheaper to produce than gasoline.

The issue with diesel fuel pricing has less to do with the real cost of manufacturing and more to do with the principles of supply and demand for various petroleum products.

Why is Diesel Fuel More Expensive Than Gasoline?

A barrel of crude oil may be “cracked” into a variety of products, including home heating oil, gasoline, and kerosene. Oil refiners can only handle a limited number of these products at once, so they prefer to prioritize those with the biggest demand.

Consequently, gasoline for passenger cars often takes precedence over diesel fuel for commercial vehicles. When diesel fuel supplies are low, the price increases naturally.

At some point during the year, oil refiners concentrate their efforts on home heating oil, a product similar to diesel fuel. At this time, typically just prior to winter, diesel fuel becomes more abundant and its price typically decreases.

This is not always the case, however, since a particularly cold winter might keep home heating oil demand high and diesel fuel production low on the refiner’s priority list.

In recent years, the federal government has legislated adjustments to the permissible sulfur content of diesel fuel, requiring refiners to produce ultra low sulfur diesel fuel.

This requires substantial expenditures in new technology and many distillations before government inspectors deem the resulting fuel acceptable. These costs are frequently passed on to customers in the form of increased pricing.

Diesel fuel is likewise subject to higher federal excise taxes than regular gasoline. Some opponents assert that the federal government is less keen to levy greater taxes on millions of individual cars than on thousands of business drivers who utilize a less popular fuel.

The entire amount of federal and state taxes imposed per gallon contributes to diesel fuel’s higher price compared to gasoline.

What Is Diesel?

Rudolf Diesel invented a distillate fuel oil for compression ignition engines in motor vehicles in 1892. Diesel fuel is an ubiquitous liquid fuel used in automobiles, railways, boats, and barges. It is also commonly used for agricultural machinery and public transit.

Diesel fuel is far less flammable than gasoline and dissipates slowly. While the risk of fire is substantially smaller, a spill on the road might create a hazardous scenario.

Diesel may leave behind a particularly slick surface, comparable to that of black ice. This may easily lead riders of motorcycles and bicycles to lose traction.

Has diesel always been more expensive than gasoline?

No, in a word. Initially viewed as a more inexpensive option due to its higher miles per gallon, diesel was favored by motorists seeking to save money. Likewise, diesel was cheaper per gallon than gasoline.

Why is Diesel Fuel More Expensive Than Gasoline?

According to data compiled by the US Energy Information Administration, diesel was less expensive than gasoline as recently as 2004. Since then, gasoline has consistently been the more affordable option. However, the tax hikes have originated from the states, as the federal government has not changed the federal tax rate on gasoline or diesel since 1993.

When Did Diesel Fuel Become More Expensive Than Gas?

According to the United States Energy Information Administration, diesel was less expensive per gallon than gasoline until 2004. Since then, gasoline has continuously been less expensive than diesel.

It is vital to remember that since 1993, the federal government has not increased the federal tax on gasoline or diesel. Over the previous three decades, the majority of states have changed their gasoline taxes many times.

Why is Diesel Fuel More Expensive Than Gasoline?

Why Is Diesel More Expensive at Truck Stops?

The majority of truck stops, particularly large chains, have made partnerships with trucking firms that give a substantial discount for bulk purchases. Numerous trucking firms will guarantee a minimum quantity of gasoline purchases at a reduced rate.

Trucking businesses are able to purchase in bulk since semi-trucks may purchase hundreds of gallons of fuel at a time.

The trucking firm receives a large discount, and the truck stop chain sells diesel to them with a much reduced profit margin. It’s a win-win situation for the transportation firm and truck stop.

Why Is Diesel Tax Higher?

The majority of fuel tax earnings are utilized to maintain roads and transportation infrastructure. Typically, heavier trucks cause greater road surface damage, and the bulk of vehicles transporting huge loads are diesel-powered.

Many states attribute the increase in fuel taxation to road deterioration. While avoiding potholes on interstates across the United States, it can be difficult to discern where tax income is going.

Is Diesel Cleaner Than Gas?

Many individuals who view films of truck operators “rolling coal” incorrectly assume that gasoline is cleaner than diesel. However, the National Center for Biotechnology Information (NCBI) reports that diesel engines are 25% more efficient and contain 13% more energy than gasoline engines.

Why is Diesel Fuel More Expensive Than Gasoline?

Despite the fact that previous diesel vehicles produced a great deal more pollutants, significant progress has been made in the past 15 years. The development of diesel exhaust fluid systems has assisted in converting dangerous nitrogen oxide fumes into nitrogen and water.

Why Don’t More Cars Use Diesel?

Few incentives exist for the majority of automakers to utilize diesel engines. This would result in an increase in production expenses, which would ultimately lead to a price increase for customers. In addition to higher routine maintenance costs, diesel automobiles are unattractive to the majority of buyers.

Despite the fact that diesel vehicles have fewer serious problems, the cost of repairing them is often high. At this time, it appears that the majority of manufacturers are focused on lightweight or electric vehicles, neither of which are compatible with diesel engines.

Why is Diesel Fuel More Expensive Than Gasoline?

The general population is uninterested in cleaning up diesel automobiles, unless they are pulling a large load, despite the tremendous expansion in this area. Whether it’s a semi-truck transporting goods to a shop or a huge passenger car towing a fifth wheel for a family vacation, diesel engines play a crucial role.

Conclusion

As both diesel and gasoline are derived from crude oil, some may anticipate a strong relationship between their prices. However, a variety of variables, including taxation and production expenses, make diesel more expensive to purchase.

The high federal and state taxes imposed on diesel, in large part as a result of its carbon emissions, are the primary cause of the price gap. The federal tax on diesel is presently 24.4 cents per gallon, whilst the tax on gasoline is 18.4 cents per gallon.

FAQ

On-highway diesel fuel prices have been higher than regular-grade gasoline prices, on a dollar-per-gallon basis, almost continuously since September 2004.
Why is diesel so expensive? One major reason diesel usually costs more to purchase in the United States than gasoline is that diesel is taxed at a higher rate. The Federal tax rate for diesel sits at 24.3 cents per gallon, compared to 18.3 cents per gallon for gasoline.
Though filling up with diesel is more expensive—in recent weeks, about 25 cents more per gallon than regular gas, according to the U.S. Energy Information Administration—diesel vehicles like the GL350 get more mileage for the buck.
There are three primary reasons for the price discrepancy: the transition to cleaner diesel blends, higher state and federal taxes, and diesel’s supply and demand.
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