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Why is Diesel More Expensive Than Gasoline ?

Crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas. Diesel is cheaper to make out than gasoline, it should be cheaper at the pump. But diesel is more expensive than regular gasoline, Why is the difference ?

Diesel cars have never been so popular in US and Britain, where diesel passenger cars are still only a tiny proportion of the overall fleet. Taking this into consideration refineries produces less diesel than gasoline. Demand for diesel fuel is growing more vigorously compared to it is extracted in the oil refinery — so the higher price for Diesel. Basically it is a supply and demand problem.

Why is diesel more expensive than gasoline? Here’s the Energy Information Administration official answer.

Why are diesel fuel prices higher than gasoline prices?

Historically, the average price of diesel fuel has been lower than the average price of gasoline. However, this is not always the case. In some winters where the demand for distillate heating oil is high, the price of diesel fuel has risen above the gasoline price. Since September 2004, the price of diesel fuel has been generally higher than the price of regular gasoline all year round for several reasons. Worldwide demand for diesel fuel and other distillate fuel oils has been increasing steadily, with strong demand in China, Europe, and the United States, putting more pressure on the tight global refining capacity. In the United States, the transition to ultra-low-sulfur diesel fuel has affected diesel fuel production and distribution costs. Also, the Federal excise tax on diesel fuel is 6 cents higher per gallon (24.4 cents per gallon) than the tax on gasoline.

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