You are answering part of your own question without even realizing it. As
we all know, diesel fuel is the same as No. 2 fuel oil, which is the same
thing as home heating oil. The only real difference is that on-road diesel
fuel may have certain additives but that is not a significant cost in the
price of a gallon.
The price of diesel is cyclic over the course of the year, which is the same
as the price of gasoline but on an opposite cycle. In the summer, gasoline
prices go up because that is the "driving season" and usage goes up, but the
price of diesel goes down. Why? Because in the winter a certain percentage
of diesel fuel production is shifted to home heating oil, which boosts the
price of on-road diesel because of the reduction in supply for vehicles, and
in the summer (when nobody is using home heating oil) the supply of on-road
diesel goes up allowing the price to drop. Obviously in the winter the
price of gasoline is supposed to drop because the demand is lower. This
past fall, however, not enough diesel production was shifted to home heating
oil and available stocks were quite low at the start of the winter - this
caused a spike in the price of diesel as refiners rushed to make up the
difference and tightened up the available supply of diesel fuel for on-road
Of course, supply and demand on the consumer end is only one factor driving
the price of fuel. You still have to consider such factors as the price of
a barrel of oil, the available world capacity (which countries are pumping
more and which less), the available refining capacity, and any
transportation issues that may crop up (like a pipeline accident, etc.).
Plus there is the factor of speculation in the future prices that adds
volotility to the market as well.
Although it is easier to produce diesel fuel than gasoline in the refinery,
the refining cost is only a fraction of the cost of a gallon of either fuel.
Even though it costs more to produce gasoline, we produce much more of it
than diesel and the difference is minimized in the ecomony of scale. If you
went to a refiner and only purchased one gallon of each then Yes, the price
would be significantly different in favor of diesel; but a few billion
gallons later and the price difference due to refining cost is more than
absorbed, especially consered the other factors driving the price of both.
Hope that helps, even if just a little.
Cheers - Jonathan
The only logical explaination is: market, the ability of the consumer to
Companies will charge you as much as they know you are ready to pay.
It is, indeed, not right that diesel fuel should cost more than gasoline.
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