General Question

Mr_Callahan's avatar

Why is diesel fuel .20 cents lower per gallon than regular unleaded when it was .50 cents higher per gallon a year ago?

Asked by Mr_Callahan (806points) June 10th, 2009

Whats the big excuse this time, less trucking going on? Playing games again, fuel on the increase while the economy is still in the ditch? Folks traveling less, but fuel going up.

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6 Answers

hungryhungryhortence's avatar

pure crackpot speculation and too many hours without quality caffiend… I say it’s because the American govt. has a new “eco friendly” president/administration and diesel is less nasty (visible fumes aside) than unleaded gasoline.

Cardinal's avatar

Wasn’t long ago that diesel was 1/4 th the price of regular.

critter1982's avatar

differences in global demand and federal taxes.

Bagardbilla's avatar

MANUFACTURED supply and fickle demand.

robmandu's avatar

Diesel is less refined that gasoline. All things being equal, it should cost less.

So why was it more before? Supply was relatively low compared to ever increasing demand. There hasn’t been an oil refinery built in the U.S. in thirty years. The infrastructure we have now is running at capacity.

If the oil refineries have to compromise, I’d hazard a guess they’d make more unleaded than diesel simply because of higher potential profit. So then, diesel would be “artificially” constrained on the supply side. And its price rises as expected.

The better part of the last year, there’s been a marked downturn in driving… and hence a noticeable decline in demand for unleaded. Another guess here, but I expect that with demand slacking for gas, the refineries were able to step up production of diesel, increasing the supply – and due to competition between manufacturers – lowering of the price.

Personally, when we see weeks/months delay on how the price moves, that seems “right” to me. Fuel is produced and stored long before it ever gets into your vehicle. It’s when the price of fuel jumps overnight based purely on market speculation that I get suspicious.

mattbrowne's avatar

Global supply and demand for diesel can vary differently. The US military is a huge diesel guzzler at times.

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