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Why diesel is so expensive

June 4, 2008

Let’s take some time off from philosophizing about the future of extended range and electric vehicles and look at what may be electric and hybrid vehicle technology’s greatest competitor: Diesel.

My big fat diesel truckIf you’ve been driving for ten years or more, you may remember when diesel was significantly cheaper than gasoline. However, about four years ago diesel moved up to and then passed gasoline in price. In California it’s running about $5.15/gal, compared to $4.24/gal for regular gas.

The Wall Street Journal says the rise in diesel is due to several contributing factors, but the main one is global demand.

“Growing demand in China, Europe, and the U.S. is putting pressure on already strained global refining capacity. The move in the U.S. to ultra-low sulfur diesel during the last two years has also led to increases in the cost of diesel production and distribution. The federal excise tax on diesel fuel is also six cents higher per gallon (24.4 cents per gallon) than the tax on gasoline. Global demand for other distillate fuels, such as No. 2 heating oil, has also been rising steadily.”

Another article in the WSJ about refinery output [Corrected] says,

            “As diesel’s price increase has outstripped that of gasoline, U.S. refiners have been easing the throttle on gasoline production, cutting refinery operating rates to 86.6% from 89.5% a year ago, according to the latest weekly government estimates.

Recently, weekly gasoline output dropped an average 2.2% from the same period last year, and it is below 2006 and 2005 levels. Meanwhile, weekly distillate production, which is mostly diesel, grew an average 3.2% from last year and surpassed levels from the previous two years.”

UPDATE: I had the wrong url for the second WSJ article (thanks, W17053, and sorry for the delay.) The article is behind a reg wall now, so let me summarize: The lousy US economy is causing US consumers to cut back on all fuel consumption, but the developing world, where diesel is often more popular than gasoline, is seeing increasing demand for diesel. The higher international demand is causing diesel prices to soar. Except, as adam mickievitch points out below, in Mexico. But that’s for another post.

Posted by Margery Conner on June 4, 2008 | Comments (24)

December 30, 2009
In response to: Why diesel is so expensive
bad credit loans commented:

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November 2, 2009
In response to: Why diesel is so expensive
Dave P commented:

In Canada the price of gasoline is well above that of diesel. I sure wish I had one of the two VW Golf's I once had. They were really good. The oil speculators and the oil companies do not seem to be suffering.


October 7, 2009
In response to: Why diesel is so expensive
tony almeida commented:

This is rather late for a response, but someone asked about H2/O2 injection and whether/not it works. I tried it, at first using what I thought was SS wire, but the anode dissolved into rust in about a week. A second attempt using real SS (forgot the grade) lasted longer, but still dissolved. This time around I got marine-grade welding rods to bend into shape, and I'll (eventually) give that a whirl. When the engine's first started cold in the morning, dropping it into D and letting it idle slightly uphill out of my parking spot would have noticeable cogging as each cylinder would hit. With an H2/O2 injection (stochiometric mix of about 5A worth of current), it idled out buttery-smooth. I can't quite verify any mileage gain because it simply hadn't lasted long enough to put a few tankfuls through it to detect a definite gain above statistical noise. What I do, though, is add about 5oz of AcMe (acetone) per tankful (~3oz AcMe per 10gal gasoline). That also smoothed out some rough running when a cylinder was missing on me (vacuum leak near the #1 cylinder --> ran rich --> coked-up #1 plug and partially-fouled #2 plug). Haven't noticed any stellar gains in mileage as is claimed, but it *does* help somewhat. Too much added AcMe, though, can *decrease* mileage, so try to carefully meter how much you add.


July 15, 2009
In response to: Why diesel is so expensive
M. Simon commented:

"The government should make sure this scam ends. I would love to drive a turbo diesel Opel Vectra (that is GM Vectra) in the US." Government Motors, Government Jobs, and Now Government Oil. What will people think of next? Government Electronics? The problem with socialism is eventually you run out of other people's money.


July 7, 2009
In response to: Why diesel is so expensive
teotwawhki commented:

I just filled my tank with diesel and paid $2.499. Regular gas at the same station was 2 cents a gallon cheaper. Diesel has more BTU/lb than gasoline, so as far as I'm concerned it's cheaper. db


April 7, 2009
In response to: Why diesel is so expensive
Simon7382 commented:

As someone pointed out producing diesel is much cheaper than producing gasoline. Hence the oil/refinery companies have been ripping us off for decades, with the tacit or not so tacit agreement of our elected representatives. Higher quality (low suplphur) diesel is cheaper in Europe than gasoline, everywhere. I rent only diesel cars when I am over there, much lower cost. The government should make sure this scam ends. I would love to drive a turbo diesel Opel Vectra (that is GM Vectra) in the US.


December 17, 2008
In response to: Why diesel is so expensive
Tom commented:

I have a better idea: install a petrol engine in it. Petrol is about 80 times denser than li-ion, the engine would be cheaper than the battery pack, probably lighter, would last longer, and wouldn''''''''t deplete the earth''''''''s available lithium reserves. The emissions would be mostly CO2 and H20 which are both hungrily absorbed by plants. These same emissions are produced by humans when they get out of their battery-powered cars to push them after they''''''''ve run out of juice 20 minutes into the trip.


October 12, 2008
In response to: Why diesel is so expensive
Jasper commented:

Cars... started as electric? Whut? Cars started as horses, went to steam engines, and then moved to internal combustion. Electric cars (as in personal vehicles) are a pretty new post-WWII invention. There are trams, trains and trolley buses that are electric, but they too started with horses, moved to steam engines, then either to electric or to diesel or diesel-electric.


July 9, 2008
In response to: Why diesel is so expensive
Smiler commented:

They all realise that we will all be dead soon, so grab as much as you can!


July 8, 2008
In response to: Why diesel is so expensive
Tender Vittles commented:

It's about the money, stupid!


July 7, 2008
In response to: Why diesel is so expensive
M. Simon commented:

"The oil companies still continue to make up new stories to justify their price gouging to no end." Well sure. You have to wonder why they were so stupid as to only charge $3 a gallon last year. I think the guys running those corporations should be sued for not getting all the money that can for their product. Cheating their shareholders.


July 7, 2008
In response to: Why diesel is so expensive
Tom commented:

I''m anxiously waiting for Honda''s clean diesel to be marketed in the US. It is expected in the 2009 Acura tsx. I agree with LS, the hybrid-diesel should be the next power train developed. Combine the strengths of the diesel with (Toyota) hybrid technology. I''ve driven two GM light duty diesel trucks for over 300,000 miles, getting getting much better milage and engine lifetime than their gasoline counterparts.


July 7, 2008
In response to: Why diesel is so expensive
Faris commented:

Yes water gas has been used a long time Meredith; however, it was the problem of getting rid of all the byproducts that started the modern chemical industry - think analine dyes in Germany. They had mounds of solid waste that were useless from making water gas for heat and light in Europe in the late 1800s.


June 30, 2008
In response to: Why diesel is so expensive
Joe T. commented:

The oil companies still continue to make up new stories to justify their price gouging to no end. I can remember vividly in 1979 when gasoline was 5-6 times higher in price then diesel. They were making a profit then selling to the open market. How long can the consumer put up with this crap. You can also bet that the solar restriction on BLM on public land was pushed by big oil to limit competition.


June 11, 2008
In response to: Why diesel is so expensive
Bob Hale commented:

I find it remarkable that most folks are apparently unaware that diesel fuel has both a larger mass content (pounds per gallon) and heat content (Btu per pound) than gasoline. Because these should be multiplied together for any rational price comparison, diesel is obviously a far superior fuel thermodynamically. Is this a total surprise to only Americans?


June 10, 2008
In response to: Why diesel is so expensive
justDIY commented:

what does this have to do with electrical engineering?


June 10, 2008
In response to: Why diesel is so expensive
greedy commented:

The oil companies figured out how to make a lot more money without public outcry. Just increase the price of diesel. The majority of the public does not use diesel so they won't care that much. The industries that do, trucking, trains, ships and planes can pass on the higher costs in the prices they charge. The general public won't connect the dots and the oil companies can enjoy the immense profits. It just simply does not cost near as much to produce a gallon of diesel and it does a gallon gasoline. Who is going to stop them?


June 10, 2008
In response to: Why diesel is so expensive
Craig commented:

I own a 2003 VW Golf that has a 1.9L turbo diesel engine. I find the performance acceptable and it gets 47-51 mpg depending on the traffic and how I drive it. The VW diesels have been around (mosy commonly in the rabbit model that preceeded the Golf) for several decades now. They don't sell many because the diesel engines are more expensive and there is a stygma atached to them too, like cold weather starting and sooty exhaust. That's simply not true of today's diesels. The principal reason other auto manufacturers don't offer a diesel is the added cost. This is also the reason that Toyota recently expressed for not ddveloping a diesel engine for use in their hybrids.


June 10, 2008
In response to: Why diesel is so expensive
W17053 commented:

Your "article in the WSJ about refinery output" link is still not found.


June 9, 2008
In response to: Why diesel is so expensive
ryanb commented:

There is some claim on internet of generating small amount of hydrogen and injecting to engine cylinders to improve gas mileage. Are they scams ??? Any inputs anybody ??? Thanks,


June 5, 2008
In response to: Why diesel is so expensive
Matt commented:

Some good comments up there, but..... Yes its a $$$$ game, and Yes Diesel costs less to make than gas, but remember that every Jet, Train, Semi, and Ship burned the same fuel; Diesel, JetA, Mil jet fuel, etc are all Kerosene. There is some truth to the volume of diesel being used, but still the fact remains that you can get far more milage out of a diesel hybrid than a gas hybrid. Its what trains, APU's, and ships do.I agree that we need more diesel cars, but car makers wont make more because the stupid people in the country wont buy them thinking irrational negatives about the idea.


June 5, 2008
In response to: Why diesel is so expensive
arclight_arclight commented:

All: I have seen an awful lot of "facts" bandied about in this topic, but I haven't seen much in the way of real analysis. I will agree that the automotive manufacturers are definitely to blame for not looking harder and faster for alternatives. I also agree that some environmentalists have hamstrung rational energy deployments (e.g. special formulations for this and that city, instead of a single formulation that meets all the requirements (duh)) in order to further their various emotional agendas. All we can do is to keep pressing our leadership to press in turn the various position-takers to be ruthlessly accurate and complete in their analyses, and read ourselves in order to find what bits of truth can be discerned through all the emotional nonsense. Perhaps we should start punishing anyone who fails to announce the potential holes in their "facts" with a horsewhipping.


June 4, 2008
In response to: Why diesel is so expensive
Tim L commented:

There is some truth to the refining capacity, but not because there aren't enough refineries. It's because different states and even some of the larger cities (Atlanta for example) have set there own regulations about sulphur content among many ohter factors. The result is that the refineries have to make smaller batches of 'special recipes' which increases production costs, distribution costs, etc. Closely read the text above and you'll see it mentioned, however briefly, about the '...increased cost of diesel production and distribution...' Thank your local wacko environmentalist for that. While you're at it, pat them on the back for keeping us so dependant on external oil resources to keep our cars on the road by making oil exploration nearly impossible. These so-called "windfall profits" (whatever that means - do doctors/lawyers/Bill Gates/Donald Trump/etc have windfall profits?) can't even be used to explore for more oil fields that would increase supply to meet the ever growing demand because of the off-limits rulings that have been pushed through. when they are rewarded for investing in a risky market and they are rewarded for providing a service?


June 4, 2008
In response to: Why diesel is so expensive
adam mickievitch commented:

interestingly the diesel is still below $2.0 [ actually just 5.5 Peso and 11 Peso = 1 US Dollar] here in Mexico, any good excuse for the three digit billion profit for the US oil companies ?

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