Has the price of diesel been going up relative to the price of gasoline?
My family never had a diesel vehicle when I was growing up, so I never paid too close attention to it, but it always seemed to me that diesel was priced around the same as gasoline: more than regular unleaded, less than premium unleaded. (I’m talking about the mid- to late 80s here.)
During last years absurd $4.00/gallon gas phase, I started noticing that diesel was more expensive than even the premium gasoline, by a pretty fair margin. Now that auto fuel prices have dropped, diesel still appears to be more expensive than gas.
Is this a true phenomenon, or am I misremembering the days of my youth? And if diesel prices really have risen relative to gasoline prices…why?
I think you’re accurate in this, and it’s also true for kerosene (which our furnace uses), which uses essentially the same general fractions from crude, in different proportions, IIRC.
When I was young and both were cheap, diesel and kerosene seemed to be around 80-90% of regular gasoline. Now they’re more like 170% of it. I suspect it’s a case of “what the traffic will bear” on the part of the major oil companies – I can’t believe that there’s a refinery capacity/supply issue specifically attacking that element of the cracking/fractionation process.
Like you, most people “remember” that diesel was always cheaper than gasoline. However, that simply isn’t and wasn’t true. The price of diesel swung up and down relative to the price of gasoline. In the summer, gasoline usually cost more than diesel and in the winter diesel usually cost more than gasoline. The reasons have to do with supply and demand, of course.
In the summer, demand for gasoline goes up and the price of gasoline follows. In the winter, demand for home heating oil goes up. Diesel and heating oil are in competition for the available crude oil, driving up the cost of both.
That’s how it has worked for many years. There are other factors involved in the current pricing of diesel, such as new government regulations and higher taxes on diesel. Also, gasoline is very cheap right now, which makes diesel look more expensive by comparison. Higher prices for diesel and lower prices for gasoline have (probably temporarily) broken the normal swings that resulted in diesel being cheaper than gas for half the year and more expensive for the other half.
The price of diesel fuel also kicked up in the past handful of years as the refineries were adapting and refitting to produce ultra-low sulfur fuel, aka ULSD.