Why is diesel more expensive than gas?
Diesel is more expensive than gasoline because it is more heavily taxed, in shorter supply and higher demand, and is now more expensive to produce.
Written by Patrick Price
Reviewed by Melanie Reiff
Table of Contents
- Why is diesel fuel more expensive than gasoline?
- Has diesel always been more expensive than gas?
- The differences between diesel and gas
- How to find hassle-free car insurance
- FAQs
Load full table of contents
The price of diesel is higher than gas because the international demand for it is greater, it’s more heavily taxed, and recent EPA regulations have increased its refining costs.
Both diesel fuel and gasoline are produced from the same exact materials—crude oil and natural gas. Yet, somehow, a gallon of diesel fuel is much more expensive than a gallon of gasoline. How can that be?
To help you make sense of this complex issue,
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—the licensed insurance broker
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Why is diesel fuel more expensive than gasoline?
According to the
U.S. Energy Information Administration
, diesel prices have been consistently higher than gasoline prices as far back as 2004. But, over the last year, the price gap has gotten wider than ever. Today, if you drive a diesel car (or any diesel vehicle), you’ll have to pay about $1 more per gallon for fuel—which is a lot considering gas prices have repeatedly exceeded $5/gallon in 2022.
There are many reasons why diesel is so much more expensive than gas. Some of these reasons are recent developments, while others are long-standing issues. And while many of the contributing factors mainly concern U.S. politics, it’s important to remember that oil is an international trade. Events all over the world play a role in determining what you pay at the pump.
Consumption and efficiency
To understand why diesel prices are so much higher than gasoline prices, we’ll need to take a look at the different ways fuel oils are used.
While gasoline is primarily used to power personal vehicles (mostly automobiles), diesel powers virtually every aspect of the world’s transportation. Trains, trucks, heavy machinery, cargo ships, busses, and farming vehicles all rely on diesel—mainly because it offers superior fuel efficiency.
As a result, the global demand for diesel is extremely high. However, oil companies use most of their harvested crude oil to produce gasoline rather than diesel. For every 42-gallon of crude oil that gets refined, 19-20 gallons of gasoline are produced, and only 11-12 gallons of diesel are refined. Although more diesel is needed, there’s more fast profit to be had in producing gasoline.
The result is that diesel fuel is in low supply and high demand—those two elements combined always equal higher selling diesel fuel prices.
Has diesel always been more expensive than gas?
Diesel was originally developed as a more affordable alternative to conventional gasoline. It’s a denser and higher-energy fuel—meaning it can produce more power while burning less fuel. Plus, it was originally a much cheaper motor fuel to produce.
It wasn’t until 2004 that diesel fuel prices exceeded those of standard gasoline. As the global community became aware of the harmful effects of diesel emissions, action had to be taken to curtail the rapidly rising sulfur dioxide, nitrous oxide, and particulate levels in the environment. The resulting regulations created cleaner emissions but higher prices.
The differences between diesel and gas
Diesel fuel and gasoline are very similar in many ways—but extremely different in some critical aspects. Even on a molecular level, the two substances aren’t that different. They’re produced from the same crude oil—just refined differently. Diesel fuel is more viscous than gas, meaning it’s denser.
In a certain sense, diesel is like a more condensed form of gasoline—thicker and more concentrated. This means it can deliver more power, better reliability, and improved fuel economy.
The main difference, though, is in the way the two are used by their respective types of internal combustion engines.
In a gasoline engine, combustion is achieved by igniting the fuel with a spark plug. Diesel engines, on the other hand, use extreme pressure and compression to create combustion.
Is diesel cheaper to make than gas?
Years ago, before any modern environmental regulations were imposed, diesel was significantly cheaper to produce. Of course, the downside of that was the steady release of various emissions into the atmosphere.
Is diesel cleaner than gas?
No—diesel fuel is not cleaner than gas. For a long time, before the EPA stepped in, diesel emissions contained sulfur dioxide and nitrogen oxide—which caused acid rain and significant damage to everything from plants to solid stone. Not to mention, it also caused severe respiratory problems and lung damage in humans.
While the diesel that’s burnt today isn’t exactly clean, it’s certainly much cleaner. The EPA’s regulations succeeded in reducing the sulfur content of diesel emissions by 99.7%, the nitrogen oxide content by 90%, and the particulate matter by 95%.
MORE: What do the gas octane ratings actually mean?
How to find hassle-free car insurance
Whether you drive a gas- or diesel-powered vehicle, there’s one thing we could all use some savings on, car insurance. The global forces that affect your fuel prices may be beyond your control—but your
car insurance
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Compare insurance quotes from 50+ insurance companies with Jerry in under 45 seconds
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Why is diesel more expensive than gas?
Many factors affect the cost of diesel and gasoline. The major contributors include the higher tax rate on diesel, increased EPA regulations on diesel production, and severely limited crude oil availability worldwide.
Is diesel more expensive to produce than gas?
It depends on the method of refinement. Traditional diesel is considerably cheaper—but produces deadly emissions and is heavily regulated in the U.S. Ultra-low sulfur diesel, on the hand, is much more expensive—but much safer.
Is diesel more efficient than gas?
Yes. Diesel fuel is much more energy efficient than standard gasoline. It is a thicker and more highly concentrated fuel source.
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