Why Are Diesel Fuel Prices Sometimes Higher Than Gasoline Prices?
Until 2004, the average price of diesel fuel was generally lower than the average price of gasoline, except during some cold winters where the demand for distillate heating oil was high, driving up the price of both heating oil and diesel fuel above that of gasoline. Since 2004, the price of diesel fuel has frequently been higher than the price of regular gasoline all year round for several reasons. For many years, worldwide demand for diesel fuel and other distillate fuel oils has been increasing at higher growth rates than gasoline, but distillate demand seems to have caught up with refiners ability to supply the market. In addition, the transition to ultra-low-sulfur diesel fuel in the United States has increased the cost to produce the fuel, which ultimately increases price, although cleaner gasoline requirements have also increased the price of gasoline. Finally, the Federal excise tax on diesel fuel is 6 cents higher per gallon (24.4 cents per gallon) than the tax on gasoline. In
