Why is diesel more expensive than gas, anyway?
It is a very good question. Gasoline costs more to produce, as it is a more refined oil than diesel. In oil refineries, the plant takes crude oil and transforms it into different products based on its level of refinement. From least refined to most, you have bitumen, lubricating oil, fuel oil, diesel, paraffin, naphtha, gasoline, and petroleum gas. The more refining it needs, the more expensive it would be, right? If so, then why is diesel more expensive than gasoline? Let’s take a look.
Reasons Diesel Is More Expensive Than Gasoline
Taxes
Federal and state taxes have been higher for diesel than for gasoline since at least the last 30 years, namely since 1993. The reasons could be the more extensive damage heavy, diesel-powered vehicles cause to roads, the higher demand for diesel fuel, etc. Before 30 years ago, however, diesel was less expensive than gasoline.
High Demand
Diesel fuel has a surprisingly higher demand than gasoline. Semi-trucks, flatbeds, and other commercial transportation vehicles need diesel, and there are at least 2.97 million semis registered in the United States, according to truckinfo.net. Besides commercial trucks, agricultural machinery and locomotives also need diesel. Don’t forget military vehicles, jets, buses, marine tankers, and more. When demand is high, the price goes up.
Low Supply
Scarcity also increases costs. Refineries produce more gasoline than diesel fuel. On top of that, political and economic affairs influence its production and importation. Lower demand during the lockdowns of 2020-2021 may have lessened production, creating scarcity when demand increased again. The U.S. ban on Russian oil in 2022 in response to the Russian-Ukraine war also created scarcity.
New Production Method
The United States Environmental Protection Agency (EPA) and the International Maritime Organization are proposing to switch to a different fuel called very low sulfur fuel oil (VLSFO) or ultra-low sulfur diesel (ULSD). The sulfur reduction adds to the processing costs, which increases diesel costs.
How Trucking Companies Keep Trucking
Taxes, politics, and economics influence the price of diesel fuel, but through it all, semi-trucks and other commercial vehicles are persevering. Diesel engines are more efficient and last longer than gasoline engines, which helps to even out the cost between diesel and gasoline. Like all companies in times of high costs, truckers also find a way.
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