Cost of Diesel in the US

[dolphinboy]

I live on the west coast of the US so you don’t have to remind me how much cheaper your gas is than ours.

My question is simple. Why is diesel fuel right now so much more expensive than regular or even supreme gasoline? Back in the 80’s when GM and others were selling cars with diesel engines I remember the cost of diesel was either cheaper or roughly equivalent to the cost of “regular” gas. I was driving past a gas station today and the prices displayed were:

Regular $3.25 9/10
Mid Grade $3.35 9/10
Supreme $3.45 9/10
Diesel #2 $3.79 9/10

That’s a significant uplift for diesel. I know it’s not that popular, but why would someone buy a diesel engine if they had to pay so much more for fuel? And how do trucking companies deal with the inflated price? Do diesel cars get better gas mileage than non-diesel cars?

Any gas station owners out there?

[dolphinboy]

bump…

[beowulff]

Diesel engines are more fuel efficient that Gasoline engines, but right now the difference in price probably exceeds the increase in fuel mileage. I have a big Diesel truck, and I’m really avoiding driving it because fuel is so expensive. I suspect that Diesel production is limited by refinery capacity, and there just hasn’t been much incentive to increase production lately.

[John_H_1]

Why are diesel fuel prices higher than gasoline prices?

Until several years ago, the average price of diesel fuel was usually lower than the average price of gasoline. In some winters when the demand for distillate heating oil was high, the price of diesel fuel rose above the gasoline price. Since September 2004, the price of diesel fuel has been generally higher than the price of regular gasoline all year round for several reasons. Worldwide demand for diesel fuel and other distillate fuel oils has been increasing steadily, with strong demand in China, Europe, and the U.S., putting more pressure on the tight global refining capacity. In the U.S., the transition to low-sulfur diesel fuel has affected diesel fuel production and distribution costs. Also, the Federal excise tax on diesel fuel is 6 cents higher per gallon (24.4 cents per gallon) than the tax on gasoline.

Why are West Coast diesel fuel prices higher and more variable than others?

Diesel prices on the West Coast, especially in California (CA), are relatively higher than other regions of the country, partly because of taxes, but mainly because of supply issues. The State of California assesses a combined State and local sales and use tax of 7.25% on top of the 24.4 cents/gallon Federal excise tax and an 18.0 cents/gallon State tax. Washington’s tax of 34 cents/gallon is one of the highest in the country. Besides taxes, West Coast retail prices are more variable than others because there are relatively few supply sources: 21 of the 36 refineries located in West Coast states are in CA. California refineries need to be running at near full capacity just to meet in-state demand. If more than one refinery in the region experiences operating difficulties at the same time, the diesel supply may become very tight and prices may spike. The West Coast’s substantial distance from Gulf Coast and foreign refineries is such that any unusual increase in demand or reduction in supply results in a large price response in the market before relief supplies can be delivered. The farther away the necessary relief supplies are, the higher and longer the price spike will be.

source: http://www.eia.doe.gov/bookshelf/brochures/diesel/

[The_Controvert]

After Saving Private Ryan and The Fast and the Furious, Diesel’s price went up. Less so after The Pacifier.