# What is up with Diesel Fuel Prices Lately?



## Best4x4xfar (Oct 3, 2008)

I know the cost of fuel (and everything else) has skyrocketed in general, but why is Diesel up more than Gas? It used to be that Diesel was around the same cost as premium unleaded gasoline (usually a few cents less, even though federal and state taxes are higher on diesel), but currently it is about a dollar more a gallon than premium Gasoline in my area.

Everyone experiencing this right now? Anyone know why the sudden 'premium' on diesel fuel over premium gasoline?


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## Autoputzer (Mar 16, 2014)

Supply and demand. Also, the supply is somewhat fixed. Depending on the type of crude oil and the refinery, a barrel of crude produces a certain amount of gasoline and a certain amount of diesel. 

Some of our gasoline comes from European refineries. That's because Europe has a lot of diesel passenger cars, and the refineries produce more gasoline than they can sell there. That keeps gasoline prices artificially low compared to diesel. That gasoline subsidy is diminishing as Europe effectively bans diesel passenger cars due to emissions.

There's a consensus that producing ethanol for fuel doesn't have any real advantage, except the economic benefit to Big Corn. It takes about a kilojoule of diesel fuel to produce a kilojoule of ethanol. When the gooberment recently let gasoline retailers increase the ethanol content from 10% to 15%, that instantly increased the demand for diesel and reduced the demand for gasoline.


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## ATL Markus (Jan 25, 2015)

Best4x4xfar said:


> I know the cost of fuel (and everything else) has skyrocketed in general, but why is Diesel up more than Gas? It used to be that Diesel was around the same cost as premium unleaded gasoline (usually a few cents less, even though federal and state taxes are higher on diesel), but currently it is about a dollar more a gallon than premium Gasoline in my area.
> 
> Everyone experiencing this right now? Anyone know why the sudden 'premium' on diesel fuel over premium gasoline?


I lucked into $3.769/gal at the station closest to my home, when the next closest was at $4.99 yesterday. Georgia has temporarily halted State taxes on fuel, but that does not explain Shell Oil trying to get $4.99 yesterday. Whoever is setting the prices is being greedy.


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## Pierre Louis (Oct 23, 2011)

There is a massive demand for trucking and diesel always gets treated as the bad boy politically. Modern diesel cars pollute less than modern gasoline hybrids but nobody cares.


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## Autoputzer (Mar 16, 2014)

Pierre Louis said:


> There is a massive demand for trucking and diesel always gets treated as the bad boy politically. Modern diesel cars pollute less than modern gasoline hybrids but nobody cares.


The problem with diesels is that achieving low emissions requires a lot of unreliable hardware. The German manufacturers all abruptly stopped selling diesels in the US because of their warranty costs for those emission systems.


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## KWN-E39 (Feb 19, 2021)




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## mjez (Jan 16, 2014)

Let's see, what happened in the last couple of years . Ohh, yeah, we have a new administration that wants us to drive wind powered vehicles, so they're doing everything they can to keep prices high in order for people to buy more electric vehicles.


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## Kawabata (Aug 10, 2021)

It’s not all supply and demand. America added 40% to its money supply during the pandemic, which dilutes and weakens the power of the dollar. Oil and other commodities are priced in dollars, so the more the dollar weakens, the more dollars it takes to buy a barrel of oil. Then we have the war in Ukraine which has caused a decrease in supply, which pushes up prices, and we have political policies which discourage or prevent the domestic production of oil. It’s a perfect storm of events, and we haven’t yet felt the worst of it.


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## Best4x4xfar (Oct 3, 2008)

Other than Autoputzer, everyone's replies are related to general costs. As originally noted, I'm familiar with many of the factors affecting energy and other costs right now, just curious why Diesel fuel specifically has jumped significantly more than gasoline.


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## ChinaBob (Jul 27, 2016)

Best4x4xfar said:


> ... just curious why Diesel fuel specifically has jumped significantly more than gasoline.


Yes, me too, and probably a whole lot of other people. I Googled the question and came up with an article from Baron's that explains it. It's basically what Autoputzer said but with more elaboration. Here are some of the relevant excerpts from the article:

"Diesel prices are rising faster than gasoline prices for several reasons. Demand for the diesel used in trucks didn’t fall off as dramatically as demand for gasoline or jet fuel did during the pandemic. While airplane traffic stalled, and people stayed home from work, trucks kept bringing goods from factories to homes and needed fuel to get there.

"Meanwhile, refining capacity has shrunk in the U.S. and Europe because of both pandemic closures and permanent refinery shutdowns, such as the closure of a Philadelphia refinery after a 2019 fire. Diesel production competes for refinery capacity with other products like gasoline and heating oil.
Now the invasion of Ukraine, which sparked a wave of sanctions against Russia, is further pressuring diesel prices. Nearly half of European diesel imports come from Russia, according to Rystad Energy. “It is important to note that diesel imports from the rest of world were on a declining trend before the war in Ukraine started, and this makes a potential loss of Russian (ultra low sulfur diesel) even more acute,” Rystad analyst Claudio Galimberti wrote.
...

"At the same time, the amount of diesel in storage has fallen to concerning levels. At an investor conference with French energy giant TotalEnergies TTE +3.87% (TTE) last month, Morgan Stanley MS +2.18% strategist Martijn Rats said that “it sounds dramatic to say we could run out of diesel,” but at this point “it isn’t far off.”

Here's the link to the full article: Diesel Prices Are Surging. How Fuel Wreaks Havoc With Your Grocery Bill.

Of course the ramifications of suddenly rising diesel costs go far beyond those of us in the tiny speck of the US market that drives diesel cars. It affects the cost of everything extracted, grown, manufactured or transported with the assistance of diesel engines. In other words, just about everything in the entire world. You think we've got inflation now? Hang on to your hats folks ...


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## HotGrbg (Apr 23, 2021)

I wonder if I’ll see oil purchased via Yuan soon. You think gas prices are high now, wait until the petrodollar becomes petroyuan…


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## capt_slow (Sep 3, 2013)

Wendover recently posted a good explainer on the rise in gas prices. While not explicitly explaining the spike in diesel, it's good background to have (in video form).


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## Pierre Louis (Oct 23, 2011)

The video is good at explaining the variety pf factors affecting the production and price of oil, but fails to predict how economies will adjust the production of oil-based products like plastics with assumed shortages of crude. Price will drive the market as well as supply and demand.

Diesel will likely be in strong demand due to current shipping, industrial, and trucking requirements while automotive power sources will be shifting to electric with a small market share so far. I'm not sure how the future of battery power will go as the amount of power required to lug around heavy batteries is usually not talked about. Crude oil for the moment is central to many basic requirements of farming and manufacturing and its supply is crucial.

The war in Ukraine is part of a bigger process of geo-political power struggle and will certainly influence the price of oil.


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## Autoputzer (Mar 16, 2014)

I read somewhere that one of the big oil companies did a study to see what price of gasoline would cause consumers to change their gasoline use habits. It was $4/gallon. So, a decline in gasoline demand would cause a decline in gasoline production and therefore a decline in diesel fuel production.

Back during the last gas spike, around 2008, I was filling up Frau Putzer's 28 MPG Honda. The Bubba on the other side of the gas pump was bitching about how much gasoline cost... as he was filling up his older Cadillac Escalade. But, it got worse. He opened the Escalade's driver's door and asked Bubbette how much gas he should put in. She said $20. WTF? So, they had somewhere between four and five gallons to make it until their next payday. But, they still had to have an Escalade.

Anytime you see a gas pump with the previous purchase being an integer number of dollars ($10, $20, etc.) that's evidence that price affects demand.

The Putzer household's gasoline use is down to about 0.8 gallons/(person-day). That's down from 2.3 gallons/(person-day) in 2005. That's due to a combination of factors: retirement (and Frau Putzer's 56 mile/day commute and my business travel by car), old-age, illness, and more fuel efficient vehicles.


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## PC1978 (Aug 26, 2020)

I own a bread distribution territory.
When I bought the territory I bought a diesel cab over engine box truck.
It got 10 mpg.
Then the warranty ended on the exhaust system and it was costing me $1k every six months in repairs, so I sold it last fall and got a gas box truck.
It gets 7 mpg.

But I lucked up on that timing.
During the lockdowns I was paying $1.50 to $2.00 for diesel and it was about the same price as gas per gallon.
Now it is about $1.50 more per gallon, yesterday diesel was $5.39 and regular was $3.88.
Between exhaust system BS and those fuel prices, diesel is a bad deal right now.
Unless you are OTR and extremely heavy loads, where gas is not an option.

I am local delivery, so while it hurts, it isn’t killing me.
I don’t see how independent truckers are going to stay in business if this keeps up.
Freight demand and mileage rates are dropping at the same time that diesel is skyrocketing.
There has to reach a point where you actually lose money to take a run, not just cut into profits, but actually spend more in fuel (not even counting other business expenses) than the run pays out.
But at the same time, if your truck is sitting you are losing money (the fixed costs still have to be paid).


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## alacey (Mar 14, 2018)

Mobile, Valvoline, Shell, and a few other oil/fuel manufacturers are some of our largest vendors. We generally do well over $100M a year with them.

The last time a few of them came to meet with us at our cooperate offices, I asked this very question. One reason diesel is considerably higher right now is additives. Last year, when Texas had a week long freeze, it shut down many of the refineries and facilities that make these additives for diesel fuel and oil limiting supply. This is why oil was in short supply late last year and much of this year. Not because we didn't have the oil, but due to our limited supply of oil additives that also share a lot of components with diesel additives. Then there was a huge explosion in Exxon's Baytown additive refinery late 2021 along with a few other refineries in 2022 making additives in even shorter supply.

The other issue making the cost of diesel higher is due to the weight/density of diesel in comparison to gasoline. Diesel weighs 7.1 lbs versus the 6lbs of gasoline . This may not seem like a lot, but when you factor in that these tankers can hold over 11,600 gallons, then you can see how that 1.1 pounds adds up. Since these trucks are limited to 80k lbs and the truck plus the tanker trailer is already around 30,000 lbs, you will only be able to fill the tanker with about 7,000 gallons of diesel versus 8,400 gallons of gasoline before you max out at 80k. This means you need more trucks to deliver diesel than the same amount of gas. Compound the issue with the current labor/driver shortage and the fact that gasoline takes precedence over diesel in most areas, then you have an even higher cost disparity.


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## KWN-E39 (Feb 19, 2021)

PC1978 said:


> I don’t see how independent truckers are going to stay in business if this keeps up.
> Freight demand and mileage rates are dropping at the same time that diesel is skyrocketing


I was OTR for 38+ years with most of that being independent. I can tell you I made more money when fuel was high because of the fuel surcharges along with higher rates. Although I no longer drive I'm still very connected in the industry at every aspect and I can say the independents and company owners I know are doing just fine right now, rates are up and demand is high, right along with the high fuel surcharges they are receiving. Company's are paying company drivers never seen before rates (long over due) and that couldn't be done if what you say was fact.


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## Pierre Louis (Oct 23, 2011)

The beauty of a free market, which is hard to stop with fuel given the number of participants, everything often works itself out. Supply and demand will be variable and pricing will reflect that. If anything, time will march on and things will keep changing. Refining diesel includes refining gasoline so the give and take will be there but not in any extreme direction. The question of Russian oil can be answered easily: "Venezuela"


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## KWN-E39 (Feb 19, 2021)

It's too bad Texas, Alaska, Wyoming, Nebraska, South Dakota, North Dakota, New York and Pennsylvania all run out of oil at the same time........Oh wait, nvm.


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## lgr122 (Aug 8, 2012)

Terrible!!! 2,23€ per liter, which would be 9,3$ per gallon in your world. First Corona and now war in Ukraine, so no cheaper oil from Russia.

I'm very on the edge moneywise, even with steady job.


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## Atyn (9 mo ago)

lgr122 said:


> Terrible!!! 2,23€ per liter, which would be 9,3$ per gallon in your world. First Corona and now war in Ukraine, so no cheaper oil from Russia.
> 
> I'm very on the edge moneywise, even with steady job.


Yes, have pity on Brits too - diesel is $8.35/US gal and gas is $7.42


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## alacey (Mar 14, 2018)

Diesel is $5.27 where I live. Regular petrol is $3.69. My car (which is not stock) gets between 45-47 mpg at the end of every tank per my calculations, not the computer. That is between 11-12 cents per mile. A petrol car would have to get 31.5-32.5 mpg combined to get the same 11-12 cents per mile.

If you have a car that runs on premium fuel, like a gas 328i does where I live, then it would have to achieve between 38-39 mpg combined for the equivalent cost per mile.


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## Autoputzer (Mar 16, 2014)

Diesel has about 16% more energy in it than E10 gasoline, by volume. Because of the higher compression ratios of diesel engines, they also extract a higher percentage of diesel fuel's energy and turn it into mechanical energy.


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## lgr122 (Aug 8, 2012)

Autoputzer said:


> Diesel has about 16% more energy in it than E10 gasoline, by volume. Because of the higher compression ratios of diesel engines, they also extract a higher percentage of diesel fuel's energy and turn it into mechanical energy.


True, but this dear country removed that advantage giving diesel fuel higher tax.
Beside my bmw diesel fuel is used in trucks, tractors, vans, excavators..


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## Autoputzer (Mar 16, 2014)

lgr122 said:


> True, but this dear country removed that advantage giving diesel fuel higher tax.
> Beside my bmw diesel fuel is used in trucks, tractors, vans, excavators..


Our highway fuel taxes are trivial. That's why Bubba can afford to drive around in a big Ford F-250 pick-up truck. Diesel's taxes are slightly more than gasoline's since heavy trucks do more damage to roads.

Gasoline_Diesel_Taxes.webp (4962×2934) (wikimedia.org)


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## Doug Huffman (Apr 25, 2015)

Shirley Putz does not believe that highway taxes pay for construction or repair of highways. Fuel taxes are commingled with general funds.

I note that Wisconsin - my home state - diesel and gasoline fuel taxes are the same, only the Feds’ diesel tax is 6¢ higher.


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## Autoputzer (Mar 16, 2014)

All tax receipts are comingled. At my federal job we pretended there was different "colors" of money: OPN (Other Procurement, Navy), WPN (Weapons Procurement, Navy), RDTEN (Research, Development, Test, and Evaluation, Navy), OMN (Operations and Maintenance, Navy), etc. The reality is that it was green, what we called "OPM", "Other People's Money."

Gasoline is also comingled in the pipeline and tank farm system. Shell puts some gas in in one place and take some gas out in another place. The refiners of the gas that Shell pulls out of the other end of the pipeline is anybody's guess.

Oh, and don't call me "Shirley."


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## Doug Huffman (Apr 25, 2015)

Surely in my career we just called it Funny Money, Shirley Putz. It was difficult to think of burning fuel that cost US$55K per gram.

https://www.merriam-webster.com/dictionary/putz


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## KWN-E39 (Feb 19, 2021)

I remember back in the early '70's when my dad was racing TFH boats. Gas prices were .35/.40 cents a gallon but Nitro methane was stupid expensive, if I spilled even a drop while filling the tank I got hit aside the head, I think nitro was over $30 gallon back then, maybe more.


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## rick47591 (Mar 17, 2017)

Best4x4xfar said:


> I know the cost of fuel (and everything else) has skyrocketed in general, but why is Diesel up more than Gas? It used to be that Diesel was around the same cost as premium unleaded gasoline (usually a few cents less, even though federal and state taxes are higher on diesel), but currently it is about a dollar more a gallon than premium Gasoline in my area.
> 
> Everyone experiencing this right now? Anyone know why the sudden 'premium' on diesel fuel over premium gasoline?


Growing up in the 60's & 70's, I recall seeing diesel prices much cheaper than gasoline. I recall gas being about $.25/gal and diesel about $.20/gal in the early 60's. Gas wars were quite common back then and I still remember seeing gas being sold at $.18/gal. I miss those days!


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## Doug Huffman (Apr 25, 2015)

rick47591 said:


> Growing up in the 60's & 70's, I recall seeing diesel prices much cheaper than gasoline. I recall gas being about $.25/gal and diesel about $.20/gal in the early 60's. Gas wars were quite common back then and I still remember seeing gas being sold at $.18/gal. I miss those days!


Thank you for your service. USN SS ‘69 - ‘75

We were fishing in California’s back of beyond in our 1960 LR S2 88” when we found 25¢ gasoline. ‘Rover’ ran poorly until the next refill.


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## Pierre Louis (Oct 23, 2011)

Diesel may go up in price but gasoline commonly soon follows. Around here premium is not too far behind diesel in price (about $.25/gallon) so its all relative. Wife's Jaguar XE 2.0d is getting about 45 mpg so its still palatable. 535d about 36 mpg.


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## tlchuang (7 mo ago)

Diesel was more expensive the Super when I purchased my 2011 335d in 2010. But it went down in price pretty quickly. Over the years, diesel has been up and down, but mostly down. So, should get there again.


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