Why is Diesel Fuel More Expensive Than Gasoline?

Oil-refinery We hear this question a lot, especially now that passenger vehicles with diesel engines are finally making it to the U.S. The answer has nothing to do with how the fuel is produced, but rather with government decisions and economic conditions.

Europe used to export diesel fuel to the U.S., but for years forward-thinking European governments have been promoting diesel — a more efficient fuel than gas — with lower taxes and other incentives. The result has been a spike in the number of diesel vehicles there; in Great Britain and Italy, more than 50% of all cars run on diesel.

Therefore, say bye-bye to diesel fuel exports to the U.S. Without the added capacity of European refineries, U.S. diesel prices ballooned this summer when everyone realized the supply of diesel had become much more limited than it was even a few years ago.

The U.S. also taxes diesel 6 cents more per gallon (24 cents compared to 18 for gasoline). The original thinking was that diesel-powered vehicles like large trucks would tear up roads and require more spending on infrastructure. Now, with clean-diesel passenger vehicles on the road, this policy doesn’t make much sense in terms of lowering CO2 emissions and promoting efficiency.

Finally, diesel fuel is the lifeblood for big freight-haulers: Barges, trucks, trains — most all heavy vehicles run on diesel or some heavy petroleum distillate. When the economy is firing on all cylinders, they all move more stuff, and that movement requires a lot of fuel. Now that we’re in the current economic downturn, diesel prices have fallen accordingly as activity has slowed. Diesel, even more so than gasoline, is bound tightly to the speed of the economy.

Right now, the U.S. doesn’t have much refining capacity for diesel — something to keep in mind when the economy recovers and you’re thinking about buying that Jetta TDI or Mercedes-Benz Bluetec.

Why Does Diesel Fuel Cost so Much? (ConsumerReports.org)

By Stephen Markley | March 17, 2009 | Comments (6)
Tags: In The News

Comments 

Hybrit

All you "forward thinking" Euro types better stock up on the additives you'll need to add to you diesel fuel, after you go hunting around for a station that sells it. With a diesel car, you're literally one tank of bad fuel away from a several thousand dollar repair. But the people promoting diesel cars don't like to talk much about the fuel problems. People do eventually get wise to the problems and sales always drop to zero and the diesel cars are once again pulled from the market. A year ago I was reading about the Acura diesels that were coming out - I guess they've been cancelled. Subaru diesel? A no show too. GM just cancelled its light duty diesel V8 for its pickups. It will be interesting to see how long Mercedes, Audi, BMW and VW try to sell their oil burners before they're once again pulled from the market. So far the mpg ratings for all of them are disappointing compared to the hype. I can't understand why anyone would prefer a stinking diesel oil burner for a family car when there are plenty of clean burning hybrids that get better mileage, cost less and use cheaper fuel.

Thomas Baughman

All you people that complain(bellyache)about "Those smelly diesel oil burners" should think about this befor they whine and cry about " Oh My That Stinks So Bad" EVERYTHING, and i mean Everything that you whiners consume,drive, wear,eat,sleep in-on,medicine you take, furniture you set on tv you watch tools you use everything that is used in your life-time is brought to you in one of those"STINKY DIESEL OIL BURNING TRUCKS" And your comment about mileage,I own an older Diesel Ford pick-up and it gets almost twice the mileage of other gas trucks i have owned,As for Gm cancelling there diesel line its about time they never made a good one from day one. If you Whiners don,t like the smell "HOLD your breath" I hope you are at a good long stop lite

Hybrit

Autoblog.com is reporting that the previously announced Nissan Maxima Diesel has also been cancelled. It will be interesting to see if the Audi A3 TDI ever sees the light of day in the U.S. They'll probably want to charge 40K for it if it makes it here. The fewer diesel cars on US roads, the lower the diesel fuel prices for the truckers who need and deserve reasonably priced fuel.

Diesel fuel has higher energy content than gasoline

Ender of Games

"It will be interesting to see how long Mercedes, Audi, BMW and VW try to sell their oil burners before they're once again pulled from the market."

1) If you don't buy crap gasoline engine oil, it won't burn so much of it. My car doesn't burn off it's oil, it hardly moves before changes.

2) BMW is a lead seller of diesel engines? And why isn't Volvo on there? I would check your sources. It sounds much more like you are trying to 'diss' German cars than you are of diesel vehicles.

"The fewer diesel cars on US roads, the lower the diesel fuel prices for the truckers who need and deserve reasonably priced fuel."

The more fuel efficient passenger cars, the less your government will tax the diesel fuel, making it way cheaper for truckers. Actually, I shouldn't say that, because you guys have a pretty greedy government. Personally, I think the $0.06 tax for emissions is bull-crap, your government just saw a way to get more money.

"A year ago I was reading about the Acura diesels that were coming out - I guess they've been cancelled. Subaru diesel? A no show too. GM just cancelled its light duty diesel V8 for its pickups."

1) Subaru never cancelled, they produced a good engine, and they plan on making good money on it.

2) Acura has never made a diesel engine before, it's not surprising that they won't. Even if they did successfully, it might not compare to modern fuel efficiencies and emission rates.

3) GM is also going out of business, fyi, and VW, Volvo, Audi, and Mercedes-Benz aren't. GM needed government money from the US and Canada to keep them in business, so if GM doesn't make smaller diesel vehicles, that's obviously not a good economic decision for other companies to make.

"All you "forward thinking" Euro types better stock up on the additives you'll need to add to you diesel fuel, after you go hunting around for a station that sells it."

Obviously you've never been to Europe, because they sell it everywhere. Most stations sell it here, too.

"I can't understand why anyone would prefer a stinking diesel oil burner for a family car when there are plenty of clean burning hybrids that get better mileage, cost less and use cheaper fuel."

Hybrids cost less than diesels? What are you high on? Newer diesels burn clean, as well. The Mercedes-Benz BlueTec gives almost no negative emissions! In case you were wondering, that's cleaner than a hybrid!

S Smith

diesel cars get alot better fuel milleage than gasoline. I think the only reason you can not get a diesel car or light truck in the US is the goverment. Diesel being somuch higher in the US than gasoline is hurting everyone not only the trucking companys and such, it has couse the price of everyting on the store shelves to go up, there for everything such as the rising cost of diesel fuel is just passed down to the working class people.

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