Why Is Diesel Fuel So Expensive?

The cost of diesel fuel is higher. Diesel fuel is subject to a higher federal excise tax than gasoline (24.4 cents per gallon vs. 18.4 cents per gallon for gasoline), and diesel fuel is occasionally subject to a higher state tax.

Why is diesel fuel still so expensive?

On a dollar-per-gallon basis, on-highway diesel fuel costs have been higher than regular-grade gasoline prices virtually continually since September 2004. This tendency contrasts with the prior historical pattern of diesel fuel prices being lower than gasoline prices, with the exception of harsh winters when demand for heating oil drove diesel fuel prices higher. Diesel fuel costs have been higher than conventional gasoline prices in recent years for three key reasons:

  • Diesel and other distillate fuel oils have seen strong demand, particularly in Europe, China, India, and the United States.
  • In the United States, the move to less polluting, lower-sulfur diesel fuels had an impact on diesel fuel production and distribution costs.
  • On-highway diesel fuel has a federal excise tax of 24.3 cents per gallon, which is 6 cents per gallon greater than gasoline.

This Week In Petroleum delves into the world of petroleum markets. This FAQ topic is covered in greater depth in the May 20, 2009 and March 26, 2008 editions.

Other FAQs about Diesel

  • Does the EIA provide state-by-state estimates or projections for energy output, consumption, and prices?
  • In the United States, how much biomass-based diesel fuel is produced, imported, exported, and consumed?
  • How much carbon dioxide is created by gasoline and diesel fuel consumption in the United States?
  • How much does a gallon of gasoline and a gallon of diesel fuel cost?

Why is diesel less expensive than gas?

Diesel fuel is less volatile and heavier than gasoline, making it easier to refine from crude oil. As a result, diesel is generally less expensive than gasoline in most countries. The price differential would expand if demand for diesel fuel rises.

Should diesel be cheaper than gas?

Customers who drive a lot of highway miles prefer diesel engines, according to Bell Performance and Road and Track, because they are more efficient on these roads than gas engines. Diesel fuel simply has more energy per gallon than gasoline, making it more cost-effective overall. Diesel engines are still more fuel efficient than gasoline engines, but they are less so for city drivers. Diesel cars also have higher torque, which means they get better gas mileage and accelerate faster.

It’s crucial to keep in mind that some types of diesel fuel can reduce vehicle performance. Black diesel, biodiesel, and other improved diesel products are among them.

Diesel and gasoline are around the same price for most Americans. Diesel can sometimes be more expensive than gasoline, yet it can also be less expensive than gasoline. Even if you pay more on diesel fuel, a diesel engine will still provide better fuel efficiency throughout the life of the car. This is because an 8-liter gasoline engine would be required to produce the same level of power as a 6-liter diesel engine.

Diesel engines, according to Digital Trends, are more durable and endure longer than gas engines, with reliable operation and low maintenance requirements. Diesel cars used to be substantially heavier than comparable-sized gas cars, but thanks to contemporary manufacturing technologies, this is no longer an issue.

Diesel engines also have fewer components than gasoline engines, reducing the number of potential parts that could fail in your vehicle.

Diesel engines often require fewer repair and maintenance services than gasoline engines, resulting in a cost savings.

While early diesel engines had a well-deserved reputation for being noisy, current technology has largely addressed this issue. Noise pollution and dark smoke have been reduced, so if you were concerned about those issues in prior decades, you may wish to reconsider diesel as a viable option. Today, the driving experience in a diesel-powered vehicle is essentially identical to that of a gasoline-powered vehicle.

Is owning a diesel expensive?

Another reason diesel cars haven’t taken off in the United States like they have in Europe is their polluting emissions. In the United States, emission restrictions are substantially tighter. Anyone who has ever driven immediately behind a school bus or construction truck is familiar with the foul odor and heavy soot that these vehicles emit, especially when accelerating from a stop.

Fortunately, today’s diesel cars are substantially cleaner than they were only a few years ago, and they can fulfill all of the government’s pollution standards. Environmentalists will like the fact that they will be utilizing less of the non-renewable fuel source that vehicles require. Some people may explore utilizing biodiesel, which is a viable option, albeit it may reduce engine performance.

However, despite the lower emissions provided by catalytic converters, diesel cars still contaminate the air, especially when accelerating from a complete stop. Carcinogens, soot, and nitrous oxide are among the particles found in these vehicles’ exhaust. You may be better off with a hybrid or electric car if you will be doing a lot of city driving or if you want to buy a vehicle that is healthy for the environment.

  • Advantages: More fuel efficient, produce less carbon into the atmosphere, and run considerably cleaner than older diesel engines.
  • Carcinogens, nitrous oxides, and soot are released into the air by diesel emissions.

Overall Costs: Saving Money in the Long Run

When it comes to the expense of owning a diesel automobile, the first thing you’ll notice is that they’re more expensive to buy. They cost roughly $700 more than their gasoline counterparts, according to CarsDirect. However, if you retain your vehicle for a long time, you can recoup the majority of this money at the gas pump.

One of the most significant advantages of a diesel engine is its long lifespan, which improves the trade-in and resale value of your vehicle. Indeed, according to Deanna Sclar, author of Auto Repair for Dummies, 2nd Edition, numerous Mercedes-Benz diesel-fueled automobiles have surpassed 900,000 miles on the original engine.

If you intend to retain your automobile for a long time and give it with routine maintenance on a regular basis, you may expect it to save you money in the long term. Buying a diesel car, on the other hand, may wind up balancing out or costing you more in the long run if you are slack on maintenance due to the higher expense of having a diesel mechanic operate on it.

What Are Some of the Best Diesel Vehicles Available Today?

It’s difficult to compare the gas mileage of diesel and gasoline-powered cars because EPA estimates for gasoline-powered cars are typically liberal, while diesel numbers are typically cautious. However, these are the estimated mileages for some of the most popular diesel-powered cars, as well as their gasoline-powered counterparts, on the market today.

According to Edmunds, CarsDirect, Consumer Reports, and AutoTrader, these are some of the most highly recommended diesels:

  • Jetta TDI (Volkswagen): The Jetta, a Consumer Reports top pick, gets 35 mpg on average and has a low cost-to-on ratio.
  • The Volkswagen Golf TDI has a dynamic suspension, a practical hatchback, and a well-equipped cabin. On the highway, it may get up to 42 miles per gallon.
  • The Volkswagen Passat TDI is similar to the Volkswagen Golf but offers more interior room. Edmunds discovered that it routinely tops 40 miles per gallon on the highway during testing.
  • Jeep Grand Cherokee EcoDiesel: AutoTrader praises this American-made SUV with a 7,400-pound towing capability. It can “reach 30 mpg highway, providing it best-in-class efficiency,” according to them.
  • BMW X5 xDrive35d: Listed as a top pick by Edmunds and AutoTrader, this SUV has significantly more torque and fuel economy than the gasoline-powered version, and its precise handling makes it enjoyable to drive.

Of course, many other diesel vehicles offer excellent quality and gas mileage, so make sure to read evaluations of any you’re considering.

Do You Think a Diesel Is Right for You?

You are the only one who can decide whether or not a diesel car is right for you. These automobiles have the potential to save you a significant amount of money.

An independent agent may not be able to advise you on which sort of automobile is best for you, but once you’ve discovered the perfect vehicle, they can help you obtain a cheap car insurance policy that meets your coverage and budgetary demands.

Is diesel more efficient than gas?

The thermal efficiency of a diesel engine is around 20% higher than that of a gas engine. This directly translates to a 20% improvement in fuel economy. Diesel engines are employed because they have a higher fuel efficiency and thus cheaper operating expenses.

Is diesel worse for the environment?

When diesel fuel (refined from crude oil) is used, it emits a variety of hazardous emissions, and diesel-fueled vehicles are major emitters of pollutants like ground-level ozone and particulate matter. The US Environmental Protection Agency (EPA) created limits for the sulfur content of diesel fuel and emissions from new diesel engines to address this issue.

Should I buy a gas truck or diesel?

Is diesel a better fuel than gasoline? Despite the fact that diesel vehicles have more torque, hauling power, better gas mileage, and longer-lasting performance, gas trucks are lighter, faster, and better at managing heavy cargoes. In the end, your decision will be solely based on your requirements.

When was the last time diesel was cheaper than gas?

The most recent tax hike occurred in the early 1990s, when diesel fuel was generally less expensive than gasoline. ULSD is a low-sulfur diesel fuel that was gradually integrated onto the market between 2006 and 2010, gradually replacing Low Sulfur Diesel on highways.

Why don t more cars use diesel?

EarthTalk Greetings: I’m not sure why many European diesel automobiles with good mileage ratings aren’t accessible in the United States. Are you able to enlighten me?

Different countries have different regulations for how much pollution gasoline and diesel automobile engines are allowed to generate, but the reason you see so few diesel automobiles in the United States is down to automakers’ decisions rather than a regulatory mandate on either side of the Atlantic.

Since the dawn of the automobile era in the United States, gasoline has reigned supreme; now, gasoline powers upwards of 95 percent of passenger vehicles and light trucks on American roadways. And the federal government has contributed to this by taxing diesel at a rate that is almost 25% more than gasoline. According to a recent study conducted by the American Petroleum Institute, federal taxes account for 24.4 cents per gallon of diesel but just 18.4 cents per gallon of gasoline.

In Europe, where diesel vehicles account for about half of all vehicles on the road in certain regions, these tax incentives are reversed, with diesel drivers receiving the financial benefits.

However, according to Jonathan Welsh, the author of the book, “Interest in diesels—which normally offer better fuel efficiency than gas-powered cars—has grown significantly in recent years in the United States, according to The Wall Street Journal’s “Me and My Car” Q&A column. Diesels’ popularity soared, albeit briefly, in the mid-1970s, after the United States experienced its first oil embargo “Oil shock” caused gas prices to skyrocket. However, as gas prices fell, so did American enthusiasm for diesel vehicles.

With so much attention on staying green these days, diesel cars—some of which have similar fuel economy statistics to hybrids—are making a comeback in the United States. Diesel fuel sold in the United States now must meet ultra-low emissions rules, which appeals to individuals worried about their carbon footprints and other environmental implications. Furthermore, the greater availability of carbon-neutral biodiesel—a type of diesel fuel derived from agricultural wastes that can be used in place of ordinary diesel without requiring engine modifications—is persuading a new generation of American drivers to consider diesel-powered vehicles. Only Volkswagen, Mercedes-Benz, and Jeep currently offer diesel cars in the United States, but Ford, Nissan, and others aim to launch American versions of diesel models that have proven successful in Europe within the next year.

Meanwhile, the US Coalition for Advanced Diesel Cars, a trade group that represents several automakers as well as parts and fuel suppliers, wants the US government to increase incentives for American drivers to choose diesel-powered engines by leveling the fuel taxation field—so that gasoline and diesel can compete fairly at the pump—and by increasing tax breaks on the purchase of new, more fuel-efficient diesel vehicles. One stumbling block is the scarcity of diesel pumps across the United States, but if these vehicles become more popular, filling stations that don’t already have them can easily add one or two.