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mea05key's avatar

Why diesel and petrol price are different?

Asked by mea05key (1812points) October 17th, 2008

I notice that in Malaysia the diesel price is lower whereas in the UK diesel is higher as compared to petrol. Why?

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3 Answers

jvgr's avatar

Once upon a time, diesel was an undesirable by-product of gasoline refining.

I believe it was Mr.Cumings (Cumings Engines) who developed the current form of diesel engine in common use, to take advantage of lower fuel costs, especially for large, heavy vehicles.

As more and more automakers produced diesel engines for normal consumer use (which also get better mileage than their gasoline fueled counterparts), diesel began moving from by product to competitive product and in North America premium product.

Could be that Malaysia has the capacity to produce diesel that keeps price down, or that the government subsidizes diesel to keep the cost of goods down?

mea05key's avatar

generally the government subsidies a certain percentage of the fuel price but i am not sure of the amount dedicated to petrol and diesel respectively. I assume there is no difference. Initially i thought of the government incentives and policies that decide the fuel price. For example, country A government wants to reduce air polution which often associates with usage of diesel thus country A sells diesel at higher price but government B promotes diesel because the automotive industries in that country are looking into alternatives to improve the diesel engine which is ideally more powerful than the petrol engine thus reducing diesel price. Anybody out there that has any other suggestions?

boxing's avatar

You might find this article very interesting.

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