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In the late 90's/ early 2000 Diesel was about the same cost as regular gas and then at some point its about the same cost as premium gas. Is there any reason w

by t1234s 26d ago

In the late 90's/ early 2000 Diesel was about the same cost as regular gas and then at some point its about the same cost as premium gas. Is there any reason why Diesel costs more? I was always under the impression that it was a less-refined fuel therefore cheaper.

rob74 26d ago
Supply and demand? Over here in Germany, Diesel was cheaper than (any kind of) gasoline for a long time, but that has also changed recently (Gemini says since Russia attacked Ukraine in 2022, so another thing to blame Putin for), now it's about 5% more expensive...
- KellyCriterion 26d ago
  ...because Diesel is taxed differently than standard gas/Benzin there... EDIT: meaning "less taxes"
- fransje26 26d ago
  > Gemini says since Russia attacked Ukraine in 2022, so another thing to blame Putin for), now it's about 5% more expensive... No. That's not correct. It got more expensive than gasoline since the attack on Iran.
MrRadar 26d ago
Ultra-low-sulfur diesel became mandated in 2006 as the only type that was legal to sell for road use. That requires extra refining to remove the naturally-occuring sulfur from the fuel which is why the cost went up.
- Scoundreller 26d ago
  Isn’t that sulfur more valuable than ever now?
xingped 26d ago
I thought I heard once it was because diesel might be more polluting than regular gas and thus has extra taxes on it? I could be entirely wrong though.
- pc86 26d ago
  You are not required to repeat uncited and likely incorrect suppositions.
  - xingped 26d ago
    Okay and where are yours or literally anyone else's citations in this thread? Because I don't see any citations on any other comments and every other explanation could be just as equally as wrong without them. Why don't you go reply with this to every comment here? I'm sure everyone will appreciate you for it.
    - pc86 25d ago
      Yours is the only one that is "I thought I heard once ${completely false thing}. I could be wrong though."
      - xingped 24d ago
        Wow, screw me for actually being honest, I guess. I'll remember to sound more authoritative next time so no one questions my statements rather than trying to honestly invite others to share additional clarifying information. Thanks! You're totally correct! (Was that enough of an ego stroking for you? I can praise you more, if you'd like.)
- bluGill 26d ago
  Not in the US, but I believe there are some countries that have tried that. For a while Europe (in general - but individual countries had different policies!) had less tax on diesel because it was more energy efficient, then they realized it was more polluting (less CO2, but more NOx...) and started encouraging gasoline which they decided was overall better. In the US diesel taxes are often different from gasoline, but polluting is generally not a factor.
bob1029 26d ago
If the demand for other fuels increases, the cost of diesel can be indirectly affected. Jet fuel and diesel fuel come from similar parts of the barrel. Refineries can largely choose what kind of fuel they produce for a given unit of input. One barrel doesn't always split into the same fractions. There is configuration involved.
parrellel 26d ago
I have only a passing interest in this but, basically, different oil fields have different percentages of different weight hydrocarbons. The oil can be refined with catalytic cracking to make more gas / kerosene / whatever. As I understand it, we're using "lighter" oil and we're focusing on making gas, so the percentage diesel in the crack spread is lower. So, there's less diesel coming out of the refineries. This started, I believe when fracking became a major thing (the late 2000s), because shale oils tends to have less heavy hydrocarbons then the old wells.
Scoundreller 26d ago
Probably doesn’t help that the ethanol that gets (increasingly) blended with gas is pretty cheap while the seed oils blended with diesel aren’t. And the ethanol makes the fuel less valuable (energy reduction per litre) moreso than biodiesel.
jqpabc123 26d ago
I was always under the impression that it was a less-refined fuel therefore cheaper. I was always under the impression that a big part of the difference in cost is largely due to taxes.
- Merkur 26d ago
  It is, but it isn’t because of free market economy.
bluGill 26d ago
The market values Diesel more. Diesel fuel has more energy per gallon, and a diesel engine as run in the real world is more energy efficient (in a lab gasoline is slightly more energy efficient, but the difference is slight and the conditions needed to make this happen are rare in the real world). Thus those who use a lot of fuel - things like freight and earth moving normally use diesel engines. These are also applications that have less elasticity, so when price goes up they don't use less. (when gas prices go up a few people drive less - or buy more fuel efficient cars, people running diesel already are buying the best fuel efficiency they can for their needs). While diesel is less refined, the difference isn't much. These days both are heavily refined products, and the cost to refine gasoline isn't very much per gallon. The real answer: supply/demand is the key factor in the price you pay. Cost to create/build a product generally sets a floor on the price you pay: a business that isn't making money will stop making the product (loss leaders exist, but not a factor here).
- teiferer 26d ago
  That sounds like a great theory but is not consistent with the observation that until not too long ago, diesel used to be cheaper. How do you explain that? That's the problem with hindsight theories, especially if only using a limit horizon into the past.
  - bluGill 26d ago
    Supply demand. As refineries got better at cracking fuel they made more and more gasoline since that is what the market wanted. However to change the mix they need to make a long term bet on it isn't worth it to build/rebuild their expensive refinery to produce a different mix. A refinery only has a small amount of ability to change what comes out, they can't make more diesel without a major rebuild and that isn't worth it.
  - travisb 26d ago
    In North America, it's fracked oil making up for declines in conventional crude oil production. Over the past 20-ish years fracked oil, which is mostly too light to cost effectively refine into diesel but makes nice gasoline, has made up most of the increase in oil production. At the same time, conventional crude oil production has been slowly declining. Conventional crude is quite easy to refine into diesel. Heavy/sour crude replacements are more expensive to refine into diesel because more work is needed; also preexisting refineries need refitting to support it. The net result is that diesel production hasn't kept up with the wider percentage increase in oil-based fuels and refinement is more expensive because it's a choice between cheaper oil which requires more work and costly refits, or less-available and therefore more expensive base oil. Thusly diesel is more expensive due to cost of production and reduced relative supply.
xutopia 26d ago
Diesel increased in price because truck drivers couldn't afford not to drive their truck. The cartel as well as the distributors are extracting all the value they can at every step. That is why diesel has increased so much.

by t1234s 26d ago

rob74 26d ago

Supply and demand? Over here in Germany, Diesel was cheaper than (any kind of) gasoline for a long time, but that has also changed recently (Gemini says since Russia attacked Ukraine in 2022, so another thing to blame Putin for), now it's about 5% more expensive...

KellyCriterion 26d ago
...because Diesel is taxed differently than standard gas/Benzin there... EDIT: meaning "less taxes"
fransje26 26d ago
> Gemini says since Russia attacked Ukraine in 2022, so another thing to blame Putin for), now it's about 5% more expensive... No. That's not correct. It got more expensive than gasoline since the attack on Iran.

MrRadar 26d ago

Ultra-low-sulfur diesel became mandated in 2006 as the only type that was legal to sell for road use. That requires extra refining to remove the naturally-occuring sulfur from the fuel which is why the cost went up.

Scoundreller 26d ago
Isn’t that sulfur more valuable than ever now?

xingped 26d ago

I thought I heard once it was because diesel might be more polluting than regular gas and thus has extra taxes on it? I could be entirely wrong though.

pc86 26d ago
You are not required to repeat uncited and likely incorrect suppositions.
- xingped 26d ago
  Okay and where are yours or literally anyone else's citations in this thread? Because I don't see any citations on any other comments and every other explanation could be just as equally as wrong without them. Why don't you go reply with this to every comment here? I'm sure everyone will appreciate you for it.
  - pc86 25d ago
    Yours is the only one that is "I thought I heard once ${completely false thing}. I could be wrong though."
    - xingped 24d ago
      Wow, screw me for actually being honest, I guess. I'll remember to sound more authoritative next time so no one questions my statements rather than trying to honestly invite others to share additional clarifying information. Thanks! You're totally correct! (Was that enough of an ego stroking for you? I can praise you more, if you'd like.)
bluGill 26d ago
Not in the US, but I believe there are some countries that have tried that. For a while Europe (in general - but individual countries had different policies!) had less tax on diesel because it was more energy efficient, then they realized it was more polluting (less CO2, but more NOx...) and started encouraging gasoline which they decided was overall better. In the US diesel taxes are often different from gasoline, but polluting is generally not a factor.

bob1029 26d ago

If the demand for other fuels increases, the cost of diesel can be indirectly affected. Jet fuel and diesel fuel come from similar parts of the barrel. Refineries can largely choose what kind of fuel they produce for a given unit of input. One barrel doesn't always split into the same fractions. There is configuration involved.

parrellel 26d ago

I have only a passing interest in this but, basically, different oil fields have different percentages of different weight hydrocarbons. The oil can be refined with catalytic cracking to make more gas / kerosene / whatever. As I understand it, we're using "lighter" oil and we're focusing on making gas, so the percentage diesel in the crack spread is lower. So, there's less diesel coming out of the refineries. This started, I believe when fracking became a major thing (the late 2000s), because shale oils tends to have less heavy hydrocarbons then the old wells.

Scoundreller 26d ago

Probably doesn’t help that the ethanol that gets (increasingly) blended with gas is pretty cheap while the seed oils blended with diesel aren’t. And the ethanol makes the fuel less valuable (energy reduction per litre) moreso than biodiesel.

jqpabc123 26d ago

I was always under the impression that it was a less-refined fuel therefore cheaper. I was always under the impression that a big part of the difference in cost is largely due to taxes.

Merkur 26d ago
It is, but it isn’t because of free market economy.

bluGill 26d ago

The market values Diesel more. Diesel fuel has more energy per gallon, and a diesel engine as run in the real world is more energy efficient (in a lab gasoline is slightly more energy efficient, but the difference is slight and the conditions needed to make this happen are rare in the real world). Thus those who use a lot of fuel - things like freight and earth moving normally use diesel engines. These are also applications that have less elasticity, so when price goes up they don't use less. (when gas prices go up a few people drive less - or buy more fuel efficient cars, people running diesel already are buying the best fuel efficiency they can for their needs). While diesel is less refined, the difference isn't much. These days both are heavily refined products, and the cost to refine gasoline isn't very much per gallon. The real answer: supply/demand is the key factor in the price you pay. Cost to create/build a product generally sets a floor on the price you pay: a business that isn't making money will stop making the product (loss leaders exist, but not a factor here).

teiferer 26d ago
That sounds like a great theory but is not consistent with the observation that until not too long ago, diesel used to be cheaper. How do you explain that? That's the problem with hindsight theories, especially if only using a limit horizon into the past.
- bluGill 26d ago
  Supply demand. As refineries got better at cracking fuel they made more and more gasoline since that is what the market wanted. However to change the mix they need to make a long term bet on it isn't worth it to build/rebuild their expensive refinery to produce a different mix. A refinery only has a small amount of ability to change what comes out, they can't make more diesel without a major rebuild and that isn't worth it.
- travisb 26d ago
  In North America, it's fracked oil making up for declines in conventional crude oil production. Over the past 20-ish years fracked oil, which is mostly too light to cost effectively refine into diesel but makes nice gasoline, has made up most of the increase in oil production. At the same time, conventional crude oil production has been slowly declining. Conventional crude is quite easy to refine into diesel. Heavy/sour crude replacements are more expensive to refine into diesel because more work is needed; also preexisting refineries need refitting to support it. The net result is that diesel production hasn't kept up with the wider percentage increase in oil-based fuels and refinement is more expensive because it's a choice between cheaper oil which requires more work and costly refits, or less-available and therefore more expensive base oil. Thusly diesel is more expensive due to cost of production and reduced relative supply.

xutopia 26d ago

Diesel increased in price because truck drivers couldn't afford not to drive their truck. The cartel as well as the distributors are extracting all the value they can at every step. That is why diesel has increased so much.