Why Is Diesel Priced Higher Than Gasoline?

Understanding Diesel Fuels in the Current Marketplace

If you manage a construction site, commercial vehicle fleet, or agricultural business, there’s a good chance that you’re constantly monitoring the price of diesel. As expensive as unleaded gasoline is these days, diesel is consistently pricier.

But diesel was not always priced higher than gasoline. Even as recently as 2004, it was actually less expensive, but those days are behind us. As a company that offers diesel delivery to commercial clients across Long Island, NY, we have some insight into what factors affect the diesel’s cost.

Here are answers to some frequent questions we hear about diesel and why it’s priced higher than gasoline.

What Is the Difference Between Diesel and Gasoline?

Crude oil goes through a distillation process that removes impurities and separates different hydrocarbons for various end products. Two of these products are diesel fuel and gasoline.
These fuels have different properties and uses, including the following:

One further, significant difference between diesel and gasoline is that diesel is more energy-rich. In fact, it generates 10 to 20 percent more energy in combustion than gasoline, granting diesel engines more miles per gallon. You can take some comfort in this when considering diesel’s higher cost per gallon.

Why Is Diesel More Expensive Than Gasoline?

Here are three of the primary drivers of diesel’s higher price:

1. Fuel Taxes

The federal motor fuel excise tax is about six cents per gallon higher for diesel than for gasoline. States taxes on diesel vary, but they can add up to 74 cents per gallon!

2. Production Costs Due to Regulation

An Environmental Protection Agency standard from 2014 requires that diesel be ultra-low sulfur. This regulation lowers the fuel’s emissions. However, it increases the cost of refining it.

3. Higher Demand

Because diesel is predominately a commercial fuel, demand for it grows as the economy grows. This leads to higher prices. Also consider that one barrel of crude oil can yield 19-20 gallons for gasoline, but only about 11-12 gallons of diesel.

How Can I Make Fueling Easier My Diesel Vehicles and Equipment?

As you can see, the factors that affect the price per gallon of diesel are largely government- and market-driven. A local fuel company like Southville Petroleum can’t do much to affect them. However, we have several ways to make receiving your diesel easier and more efficient—which can improve your bottom line.

Our commercial customers in Suffolk and Nassau County love receiving onsite diesel delivery from Southville Petroleum. We deliver both on-road and off-road diesel directly to businesses, farms, depots, and worksites alike. You’ll save time that would otherwise be wasted sending vehicles to a service station. Plus, you can forget about collecting and reimbursing receipts. You’ll have one fuel partner for all your diesel needs!

We’re ready to create a customized diesel delivery plan for your business. Reach out to the Southville Petroleum team today and we’ll help you get started.