why is diesel priced higher than gasoline?
please don't say it's harder to produce
- Anonymous1 decade agoFavorite Answer
According to the US Department of Energy's current figures, the average retail cost of diesel is $3.38, with 63% of the cost going to crude oil, while gasoline has an average retail cost of $3.03, with 69% of the cost going to crude oil. Therefore, the cost of the crude oil used to make diesel is about $2.13 per gallon versus $2.09 per gallon for gasoline.
- 1 decade ago
The process for refining a barrel of oil to get the most diesel fuel out of it is different than the process used to get the most gasoline out of it. In the U.S. we use the process that produces more gasoline than diesel. World demand for diesel is also high which also adds to the pricing structure of diesel. Now that we move more and more goods through Canada, Mexico & U.S. those products move using diesel which also change the demand profile for the fuel. Supply and demand market forces cause the cost of diesel to be more inflated here.
- DougLv 51 decade ago
It's actually cheaper to produce than gasoline, however a few things have changed over the last couple of years. US refinery capacity is still not up to pre-Katrina levels, so we are having to import refined petroleum more, this means tanker space for diesel has to compete with gasoline and kerosene (including jet fuel) The world demand for diesel has gone up as well. Now add that the US requires ultra-low sulfur diesel, so now its more expensive to make diesel. Add the fact that diesel compete for refinery space with home heating oil (basically diesel fuel with more sulfur allowed) Now add the crappy exchange rate of the US dollar. And you have why diesel is so expensive.
It sucks, that I have a Jeep Liberty CRD that runs diesel, I get 25 mpg average compared to 19 for the gas model, but yet I'm not saving money. Oh an i bought the jeep 2 months before Katrina hit. Lucky me.
- KyleLv 51 decade ago
Basic concept.... The Demand is less for diesel than for Gasoline... Therefore the price is a bit higher...
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- 1 decade ago
simple economics.....price..is price no mater what you may think..but...look out on the roads and highways......look at every major truk hauling...materials to building sites...look at cranes...look at generators...tractors.....any major 18 wheeler on the road..what does it run on ...hmmm Diesel yup..now......lets bear in mind that every one in government knows this...but lets also keep in our thoughts this.....how do you control a market cost.? control the facotors that creat its cost..thus shipping....it cost more to ship...so more cost go into the tank.......all trucks running up and down the interstte have fuel stickers on them...saying that they pay fuel tax in a certain state( maybe not all) but also remebr that while gas make the people move diesel make the products move.....without it.....the world is up a creek....and as far as the refining goes...ehh i will agree there because Jet fuel...(woops most peple may not know this) jet fuel is pretty much just realy clean diesel fuel.....did you know that a turbine or jet can run of diesel....ok sorry of topic....as a fuel goes diesel if also very versitile..in that the fact over gas i would not hesitate to say its the most used fossil fuel on the market, and because of that....its taxaxtion and fees , increase, im not sure of the exact number but id be willing to bet lets say that one gallon of diesel cost 5 dollars a gallon....this is essentialy what the purson who buys it is paying
1.50 Tax Fedral
.50 Refining Cost
and the rest is more than likey the real cost of the fuel. now this is mostly just geustimation on my part....but i feal if you look into it im not that far off
- 1 decade ago
Thanks in part...Due to the new Low Sulfur standards on diesel...Because of the Tree Huggers, and the lobbyist, who supports the tree hugger. You see to obtain lower sulfur, requires serious temperature control methods, and constant re-running diesel through the refining process, until the sulfur standard is obtained. More cost to refine = passing the price onto the consumer. The other reason? Our pompous President wanting to go to war with anyone who disagrees with him.
- John MLv 61 decade ago
diesel is easier to make, but it is more in demand around the world, so it brings a higher price.
most cars run on diesel in the UK.
- 1 decade ago
they much much more gasoline than diesel. and lately people have been wanting to buy more diesel cars.
so the scarce quantity of diesel is being stretched.
- Anonymous1 decade ago
there is more of a demand on it because almost every busness has diesal ecuipment and during the winter it will climp because of the price for trucks to do snow removal also it is the same as home heating oil one of the main reasons the price spikes during the winter