Why is Diesel More Expensive than Gasoline?

[BBDartCA]

In Western Europe, diesel is cheaper than the lowest grade gasoline. In the US, diesel is generally more expensive (for the past 8 year or so) than super unleaded. Why?

http://www.see-search.com/business/fuelandpetrolpriceseurope.htm

 

[eljefino]

taxes and lack of sulfur.

 

[bruno]

No good reason here . In Europe diesel is heavily subsidized while in this country there is no subsidy . As far as processing costs there is no reason for diesel to cost as much as regular gas . People mention sulfur content as the reason for the cost of diesel but gasoline is distilled , desulfurized and raised in octane to make a salable product , The real energy cost comes in raising octane - a very energy intensive process and one which diesel doesn't require .

 

[simple_gifts]

Supply and demand, much of the Northeast US heats with #2 heating oil, which is effectively the same as diesel. Several winters ago, diesel was $.70/gal more than gasoline.

 

[Bluestream]

Chinese demand for middle distillates.

 

[fdcg27]

I think you're right, but it isn't just heating oil.
The demand for diesel is probably less price elastic than that for gasoline.
Most gasoline is used with some discretion.
When prices are high, people will drive less, and they'll also use their various gas powered toys, like ATVs, motorboats and RVs less.
The number of diesels in the passenger vehicle fleet in the US is negligable.
If I have a fleet of OTR trucks or airliners, or I heat my house with oil (I do), I can only grit my teeth and pay the price for the fuel.

 

[QuadDriver]

Diesel is ineslastic.

Has to be used for heating oil with no replacement.

Has to be used for rail transport with no replacement.

Has to be used for OTR trucking with no replacement.

People, can always drive cars less, making gasoline somewhat elastic.

The main consumers of diesel have to 'pay the frieght' as it were and live with it.

edited to add: yeah, what the guy in front of me said

 

[Wilhelm_D]

Originally Posted By: BBDartCA
In Western Europe, diesel is cheaper than the lowest grade gasoline. In the US, diesel is generally more expensive (for the past 8 year or so) than super unleaded. Why?


Refining capacity in Europe is optimized towards diesel production.

The crude used in Europe is generally low sulfur.

It is very difficult to add refining capacity in the US due to a plethora of state and federal laws and regulations, and no one is going to put the money into adding diesel capacity without a base to support it.

And removing sulfur from crude costs money.

 

[bullwinkle]

Around these parts it is caused by a LACK of competition-the largest retailer here (Speedway) jacks up the price, and 95% of diesel retailers match their price. Setting up a mad scramble by diesel users like me to locate the 5% straggler stations & buy it before they go up. For example, I was out east Friday & Speedway jacked diesel up to $3.999-and I waited in line 3 miles away to fill up at a UDF/Mobil for $3.699 before they found out & went up too.

 

[andyd]

Far as I can tell, heating oil is just ULSD diesel without the highway taxes. When I bought the place 30 yrs ago ,oil was 28 cents a gallon. I used to go through 3 tanks a season. 800 gallons. So far I have slid by with 450 gallons and a cord of wood. The house is a lot tighter now and I am using more blankets and sweaters.

 

[Smoky14]

It's only fair, more BTUs in a gallon of diesel than there is in a gallon of gas.......you are paying for energy.

 

[Bluestream]

Originally Posted By: Smoky14
It's only fair, more BTUs in a gallon of diesel than there is in a gallon of gas.......you are paying for energy.


Then why for most of the past 60 years has diesel been cheaper than Gasoline?

 

[ls1mike]

When I worked for Air Products we had and O2 plant on the grounds of a large refinery up here in WA. It took more engery to make the stuff, plus that plant made only diesel and diesel like products (Kerosene, JP-5, Product for black top).

 

[BBDartCA]

OK, some hints to the right answer. But the answer is in the Euro zone they put massive taxes on gasoline to reduce Co2. Since diesl's generally get beter fuel economy, this was a way to cut total fuel use and thus reduce C02 emissions. Als a good way to stick to the oil producers. What's connected to this for us is that some of our supplmental diesel supplies have histroically come from Europe and elsewhere. Now those supplies are real tight due to a surge in Euro demand. Our exports of finished diesel fuel (due to the Euros largely)have also exploded! Check the below graph.