At a time when automakers are about to roll out more diesel cars, it’s a bit off-putting to see diesel prices so high, especially because only a year ago they were more than $1.50 cheaper per gallon than they are now. The national average for diesel is now around $4.50 per gallon, compared to $2.80 last year at this time.

Part of the reason why diesel prices are so high is that, worldwide, there are more diesel vehicles now and demand for the fuel is high. Other countries have jumped all over diesels because of increasing oil prices and the excellent gas mileage that diesel engines get.

From the KickingTires article, “Why is Diesel More Expensive Than Gas?”, author Stephen Markley writes:

“Meanwhile, here in the states high gas prices have led Americans to consume less gasoline. In turn, refineries have scaled back their overall production to adjust to the lessened demand. However, the demand for diesel fuel remains the same even though refineries are processing less fuel overall.

“Lawrence Goldstein of the Energy Policy Research Foundation told The New York Times that ‘it is as if sirloin had become so expensive that demand dropped, so farmers raised fewer cows, reducing the supply of hamburger — but hamburger remained as popular as ever.’”

Stateside, the introduction of clean diesel, low-sulfur fuel has also contributed to a price jump because, according to the Department of Energy’s Energy Information Administration, the new fuel has impacted distribution and production costs. EIA lists factors that impact diesel prices in a diesel Q&A, “Diesel Fuel Prices: What Consumers Should Know”:

Learn more

Answered by Joe Bruzek on May 21, 2008 in Green/Hybrid Cars , I'm Just Wondering , What Does This Mean? | Permalink

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