Why does diesel fuel cost more than gasoline? —Don
For the past 10 years I ran a company called Easiwash that manufactured and installed a pressure washing system in fast food restaurants all over the country. We had three diesel trucks pulling trailers that put on more than 100,000 miles each, every year. I had the same question and also wondered why there was such a variance in different parts of the country?
So I did a little research and found information from the U.S. Energy Information Administration (EIA). It states there are three reasons diesel fuel costs more than gasoline. The website also states that diesel prices were actually lower than gasoline prices until September 2004.
The first reason diesel costs more than gasoline is that the demand for diesel fuel increased. That required more exploration and drilling, which is an added expense for operations.
Second, is the transition to less pollution types of diesel fuels such as lower sulfur content. That increased the price of production and distribution.
And finally, the biggest price factor is the excise tax on a federal and state level per gallon. According to the EIA, the federal fuel tax on gasoline is currently $0.18 per gallon, while diesel is $0.24 per gallon. Each state has its own excise tax, as well. Pennsylvania is the highest, at $0.74 per gallon of diesel (California is $0.51) and $0.58 for gasoline (California is $0.39). Virginia is the lowest in the Lower 48 states, at $0.16 for diesel and $0.20 for gasoline.
Dave Solberg is a leading expert in the RV industry and author of the “RV Handbook” as well as the Managing Editor of the RV Repair Club.
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