Why is diesel more expencive per gallon then gasoline when gasoline is more expencive to refine?
- NNYLv 61 decade agoFavorite Answer
because the industry is crooked
- David in KenaiLv 61 decade ago
Sounds like you drive truck.
It varies from state mostly on tax policies. In states with a stronger trucking lobby, taxes on diesel fuel may be lower. Other states ding diesel users more.
Historically (pre 1985 or so), diesel was somewhat of a waste product of gasoline refining. If you separated out gasoline, you ended up with a bunch of diesel and therefore it sold for less.
But by the mid 80's, cars got more efficient while trucks did not (and more cars burned diesel). And the refineries got better at converting heavier oil fractions into lighter-end products through catalytic "cracking" units. So the supply/demand imbalance that previously favored diesel users largely went away.
Add ever increasing air travel (jets and turboprops essentially use diesel - the fuel is in the same distillation and molecular weight range) and diesel-range products are now in at least as much demand as gasoline.
Also, with low-sulphur regulations coming on line, refineries have been having to add desulphurization equipment to produce diesel fuel. The capital and operating costs of those processes gets passed along.Source(s): Chemical engineering education, consulting to oil companies for 18 years. (And a lot of road trips all over the country).
- Anonymous1 decade ago
Although diesel requires less crude oil per litre, it is not a 'waste' product and new Commonwealth Fuel Quality Standards for lower sulphur diesel require a more complex refining process.
Also, wholesale prices for diesel (and other fuel products) are based on an import parity system, which means that international supply and demand for the product has a significant influence on the price paid by local consumers. For more about import parity prices, see 'Petrol Prices Explained'. To look at the current benchmark prices for diesel, visit our Benchmark Prices page.
- Mike CLv 41 decade ago
diesel has more taxes associated with it because it causes more pollution than conventional gasoline. The added taxes are used to regulate/monitor the particulate pollution that is generated from burning diesel fuel.
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- 1 decade ago