March 22, 2015

Why is Diesel More Expensive Than Gasoline?

If you drive a diesel car in the US like I do, you often find that diesel commands a higher per-gallon price than regular gasoline. You may also notice that in winter the price difference is higher than in summer, with the largest difference occurring in March.

This is because diesel is similar to home heating oil. Demand for heating fuel peaks around February; it is this competition that drives up the price for automotive diesel as well. This chart from FactCheck.org illustrates very nicely how in the summer of 2000 diesel was quite a bit less expensive than gas, while in March of 2008 it was more expensive.

That's for the general picture. But there are usually regional differences. For instance, this winter of 2015 has been unusually cold for the US Northeast, whereas the western US has experienced record high temperatures. You can see that really well in this graphic.

For the months of January and February 2015, just about the entire world has seen higher temperatures than even in the three preceding decades (never mind the pre-industrial average). Everywhere except the northeastern United States.

Which is how the Senator from Oklahoma was able to declare that global warming is a hoax because he managed to make a snowball - which he duly brought into the Senate floor for Show And Tell. Which prompted a brilliant response from Senator Whitehouse, who is described by Crooks and Liars as "stepping up to the mic with his fact snowplow to clear away the mess." I highly recommend taking the four minutes to watch the Senator from Rhode Island give his rebuttal.

But I digress.

The uneven distribution of unseasonable cold and heat throughout the United States is clear from the fuel prices at the pump, summarised in the table below, which also shows the price difference between diesel and gasoline.

Price of regular unleaded gasoline and diesel ($ per gallon) and their differences for various regions in the US for the week of 16 March 2015. Data from http://www.eia.gov/petroleum/gasdiesel/

In the week of March 16, 2015, diesel was a whopping $0.80 higher than regular unleaded in New England ($0.83 for the Mid-Atlantic states). The price difference was much lower everywhere else, and there was hardly any price difference at all for the West Coast.

As we move into the spring the price difference will become much smaller even in the northeastern US - with any luck diesel may even become less expensive than regular gasoline over the summer.





You may also like:
1. What's so clean about diesel?
2. Strategies for increased fuel efficiency
3. What is greener: drive your old gas guzzler it till it dies, or trade it for a new gas sipper?


1 comment:

  1. Well this is interesting! So, in effect, the way we heat our homes affects the price of diesel fuel for our cars. Another incentive to use a more Eco-friendly form of heating. As always, I learn so much from your posts! Thank you!


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