why is diesel more expensive than gasoline?

Geo-TH,In

Well-known Member
I found this article to be very informative. I didn't realize
diesel was heavily taxed/

Data produced by the US Energy Information Administration shows
that diesel was cheaper than gasoline as recently as 2004. After
that point, gasoline has consistently been the cheaper of the
two.

However the tax increases have come from states, because the
federal government has not adjusted the rate of federal tax on
either gasoline or diesel since 1993.

The major reason for the cost disparity is the high federal and
state taxes levied on diesel, largely due to the carbon
emissions produced. The federal tax on diesel is currently 24.4
cents per gallon, as opposed to 18.4 cents for a gallon of
gasoline.

The rate of tax levied by states varies massively, but some add
as much as 74.1 cents per gallon of diesel.
article.
 
Thats all fine and dandy, however. it is only as of late that diesel has been higher than gasoline, or for certain to this degree. Since no new tax has been levied as of late, the difference in pricing is not do to tax.
A friend works at the largest refinery here in Minnesota, and in casual conversation. he claims they are not making any diesel and have not been for the past couple of months. cause they have no place to put it, tanks are full. Hmmm, if this be the case, then why is it high priced? He has no clue.
I read an article about the big oil companies, which may shed some light. 60% of the big oil companies answer to a board and share holders. Share holders dont want the capitol spent to explore or drill new wells for several reasons. 1. The government (s) will not commit to anything long term, so drill today, cancelled tomorrow. 2. Share holders want thd profits. 3. This is kind of scary, too many shareholders are against big oil, and want them to cease all liquid feuls. It was an interesting read, but still doesnt answer why feul is so high, espeacialy diesel.
Another food for thought issue to consider.
The Keystone, had it been finished would be charging $12.00 per barrel to ship, and the rail was to get ,$29.00 a barrel, per a couple of year old figures. But, now add allmost 50% feul surcharge to that rail price. Just like with trucks, feul surcharge on transport, can actually be self climbing, never ending.
 
Diesel is now $1.40 per gallon more than gas.

2004-06... Just about the time that diesel pickups started to sell to ego strokers in a big way.
And ever since, being bought by the look at me crowd.
So know it is in such demand, the refineries can easily jack the profit margin higher due to so much demand.
 
A lot of those ships were converted to LNG.
Manufacturing of the large LNG storage tanks was huge a few years back. Not sure why that market tapered off.
 
My opinion, sales and usage makes up for more of the price differential than the taxes.

I can remember not to long back (20 plus years ago), there was only about 1 in 20 pick-ups that had a diesel engine in them. Now, half or better, full sized pick-ups have a diesel engine. My experience in watching at the filling stations, and what's available on used truck lots, diesel engine pick-ups are way more popular now.

That many extra diesel vehicles on the roadways, are going to use up a considerable amount of extra diesel fuel. Not a mystery to me why diesel is higher.

I might also add, that there are fewer GAS HOG vehicles out there on the roadway too! For every extra diesel engine out there on the roadways now, there is one less GAS HOG engine out there.
So it's kind of a double edge sword. Affects things in two ways, not just the one.
 
Just like gain, other wholesale commodity prices including diesel fuel are set in the commodity markets, regardless of the cost of production. Last year grain prices were significantly higher than the cost of production and farm income and profits were outstanding. So far this year grain prices are still high compared to input costs.
 
I worked for a construction company for 40 years. Around 2004 we started to install auger cast piles for several refinery's. Before we started they had a meeting with the crew. The government made all the refinery's process all the diesel fuel. The plant told us that this wasn't something that they were doing. Diesel was being processed to get some of the pollutants out. Diesel is the first thing that they get out of crud oil. Gas is a second process. Several months after we completed these jobs Diesel became higher in price then gas.
 
(quoted from post at 14:07:41 05/10/22) Diesel is now $1.40 per gallon more than gas.

2004-06... Just about the time that diesel pickups started to sell to ego strokers in a big way.
And ever since, being bought by the look at me crowd.
So know it is in such demand, the refineries can easily jack the profit margin higher due to so much demand.


Last I new diesel pick-ups haven't been selling for some five years. meanwhile OTR trucks are getting 1/3 the MPG of diesel pick-ups. From what I see there are a pretty good number on the road.
 
Switching to ultra low sulfur diesel fuels cost oil refinery's 8 billion dollars a few years ago. Maybe they are passing this cost on to consumers. B 20 bio diesel fuel is 0.14 / gallon cheaper than regular 100 % diesel fuel. This is diesel fuel diluted by 20 % with soybean oil. Diesel owners should run B 20 diesel to save some money. It has just as high cetane rating as regular diesel and more lubricity than regular diesel and should be cheaper to boot. Our air is cleaner also from less emissions.
 
The tax on diesel is higher per gallon than on gasoline because its easier for a law maker to pass diesel taxes because for the most part you are taxing a business; not the gasoline car driving mom and pop that voted you in.
Just like it was easy for the government to pass a law saying heavy road destroying trucks need to pay an annual heavy vehicle use tax.
But that has been true for years so that is nothing new.

Diesel surpassed the price of gasoline with the EPA laws of sulfur content.
It became more expensive to make diesel with such low sulfur content.
That made diesel about 20 cents more per gallon than gasoline.

The reason diesel has rose to over a dollar per gallon more than gasoline is because someone is threating to cut off natural gas lines. Places that rely on this natural gas are changing their game plan and buying diesel in record amounts. Its because of these people buying up diesel that diesel is really in short supply.
The company I work for buys millions of gallons of diesel per year.
They keep track of what is going on in the diesel world.
We are on mandatory fuel at the end of every shift even if the truck only needs 20 or 30 gallons.
We are also to report any store diesel supply shortages we see out on the road.

The price of anything goes up when it is selling in record amounts and in short supply.
 
Blame taxes if you like, but the real reason diesel is more expensive than gasoline is it is more valuable. Meaning it has more energy per gallon. If motor fuels were sold by weight rather than by volume, the two fuels would cost about the same.
 
But there is more gasoline in a barrel of crude oil, than there is Diesel, in the early 1950's,Gas was higher,then more company's started building better Diesel engines !!!
 
Diesel is less refined than gasoline, so theres that, but when I bought my 2000 f250 in 2004 diesel was $1.74 a gallon, I dont remember the exact price but I know gas was more than that, as far as the longevity, ease of maintenance, pulling power, ect, Ill keep my diesel even at $6.49 a gallon here, sickening price I know, yes oil changes cost more my 7.3 takes almost 4 1/2 gallons of oil, other than that and the fuel filter only other thing Ive done to the truck is an alternator and a water pump, no spark plugs to deal with no plug wires no coils going bad nothing, and it has 234,000 miles on it, I guess it boils down to demand, more diesel truck, price goes up.
 
(quoted from post at 19:17:46 05/10/22) Blame taxes if you like, but the real reason diesel is more expensive than gasoline is it is more valuable. Meaning it has more energy per gallon. If motor fuels were sold by weight rather than by volume, the two fuels would cost about the same.


Mark, it would be nice if we paid according to BTU content and value, and while value is part of the picture it is still mainly plain old supply and demand and free market pricing that we treasure. Remember that we used to pay much less for fuel than for gasoline due to supply and demand.
 
I don't get some of the responses here. Diesel fuel has more BTU's to it so more power to the gallon than Gas. And back when, Gas was a throw away byproduct of refining oil for other products like lantern oil, lubricating oil, Kerosene, and diesel fuel. They actually used to pour the left overs back down old wells lots of gas went there back when. Gasoline was a by product or throw away. Ford even looked at how he could use in in his engines when he started with engines back in the beginning. If you look at a cracking tower the waste comes off the top as they crack off the products and oils are sooner then fuels like diesel ,kerosene then diesel fuel and last is gas with the throw away left. Now Gas has become of value in the last 75-100 years so it is not thrown away like it used to be.
 
(quoted from post at 18:53:45 05/10/22)
(quoted from post at 14:07:41 05/10/22) Diesel is now $1.40 per gallon more than gas.

2004-06... Just about the time that diesel pickups started to sell to ego strokers in a big way.
And ever since, being bought by the look at me crowd.
So know it is in such demand, the refineries can easily jack the profit margin higher due to so much demand.


Last I new diesel pick-ups haven't been selling for some five years. meanwhile OTR trucks are getting 1/3 the MPG of diesel pick-ups. From what I see there are a pretty good number on the road.

Virtually everything ends up on a truck at some point. Trucks burn diesel.
 
I always thought that when an item became more popular and thus mass produced the price went down. Like LED bulbs.
Dave
 
(quoted from post at 04:26:20 05/11/22) I always thought that when an item became more popular and thus mass produced the price went down. Like LED bulbs.
Dave


Yes Dave, Maybe you now something that the rest of us don't??? While fuel use is increasing, which I suppose you could popularity, and yes I suppose you could call refineries mass production. But common knowledge is that we have constant ongoing problems with refinery capacity, and very little exploration and drilling going on. Perhaps you could share where all the additional refineries are and where all the exploration and drilling is happening.
 
Because of new refining techniques called cracking a barrel of oil produces more gas now then ever before but this means is produces less diesel.
 
Me too. So I enroll in Economics 101 and the prof. said as consumption goes up so does the price (GREED). That went contrary to my way of thinking. I got up and walked up. So much for higher education.
 
(quoted from post at 22:17:46 05/10/22) Blame taxes if you like, but the real reason diesel is more expensive than gasoline is it is more valuable. Meaning it has more energy per gallon. If motor fuels were sold by weight rather than by volume, the two fuels would cost about the same.
hile energy content alone would call for diesel to be 28% more than gasoline, tax difference calls for more than 28% difference. Together, greater than 70%.
 
(quoted from post at 21:40:33 05/10/22) My opinion, sales and usage makes up for more of the price differential than the taxes.

I can remember not to long back (20 plus years ago), there was only about 1 in 20 pick-ups that had a diesel engine in them. Now, half or better, full sized pick-ups have a diesel engine. My experience in watching at the filling stations, and what's available on used truck lots, diesel engine pick-ups are way more popular now.

That many extra diesel vehicles on the roadways, are going to use up a considerable amount of extra diesel fuel. Not a mystery to me why diesel is higher.

I might also add, that there are fewer GAS HOG vehicles out there on the roadway too! For every extra diesel engine out there on the roadways now, there is one less GAS HOG engine out there.
So it's kind of a double edge sword. Affects things in two ways, not just the one.
found an article from 4 years ago that stated that diesel pickups represented 13% of the pickup market. Can you prove what you say?
 
The cracking process is not new. It's actually one of the older technologies in a refinery, so much so that no new Fluid Catalytic Cracking units have been constructed in a very long time and none of the major refiners will ever build a new one.
 

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