Why Does Diesel Cost So Much? In part two of a two-part series on diesel fuel, Consumer Reports finds that there are three main reasons diesel fuel costs so much, according to the petroleum experts they interviewed. The most obvious reason? Higher taxes. [CR]

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  1. FortyMegaFonzies says:

    The tax difference between diesel and gasoline: $.06 per gallon. Seems pretty trivial to me.

  2. ThatIdiotJeffrey_GitEmSteveDave says:

    I was also under the impression that new laws were put into place requiring additional refining steps for diesel fuel to reduce certain things, which raised the price as well. AFAIK, Diesel is one of the first grades that can come out of a barrel of oil, so there should be more produced per barrel than regular gas.

    • kc2idf says:

      @ThatIdiotJeffrey_GitEmSteveDave: Diesel also has a higher energy density than gasoline, and diesel engines are more efficient in their conversion of that heat potential into mechanical energy (hence the usage on long-haul applications: you don’t need to carry as much fuel to get the job done). This translates to a typical 50% improvement over gasoline in fuel economy. For example, if you get 30 MPG from a gasoline engine, it is not unreasonable to expect a similar car with an equivalent diesel engine to get 45 MPG.

      That being the case, it is perfectly sensible that the tax on diesel reflect the additional miles (and resultant road wear) that will be had from the gallon of diesel versus the gallon of gasoline.

      Does anybody know if ethanol is taxed similarly low?

      • Whiskey Tango Foxtrot says:

        @kc2idf: With this kind of benefit in terms of efficiency and MPG why aren’t more cars in North America diesel?

        • Kogenta says:

          @Whiskey Tango Foxtrot: I’d guess it has something to do with engines. You mainly see disel engines on big vehicles like trucks and buses and trains. If a disel engine has to be substancially larger than a gasoline engine, I can see why manufacturers wouldn’t want to use it in small vehicles.

          • TacoChuck says:

            @Kogenta: You haven’t seen the smart car I drive then, they don’t get much smaller than this:
            [picasaweb.google.com]

            It is a diesel and I get 60-65 mpg. I live in Switzerland and haven’t ever had a problem with it in the winter starting. The car itself sucks in the snow, but that is a different story, the engine has never had a problem starting or running in the winter.

        • Eyebrows McGee (now with double the baby!) says:

          @Whiskey Tango Foxtrot: Diesel smog makes your boogers black!

          It’s slightly disconcerting.

        • dohtem says:

          @Whiskey Tango Foxtrot:

          I was curious as well. A quick search returned this – [www.treehugger.com]

          The cons: Diesel engines are very durable, which means that very dirty old trucks are still on the road, they generally produce more smog-forming emissions (NOx, PM, etc), they are more expensive than gasoline engines, and they can be noisier and smellier (though recent models have made lots of progress there).

          • ThatIdiotJeffrey_GitEmSteveDave says:

            @dohtem: Well, I would normally look skeptically on a site which says they hug trees. That being said, true, there may be older trucks on the road, but that also means a lot of stuff isn’t sitting in a scrapyard. It also reduces need to get/mine/make materials for a newer car. As for the noise and smell, I live on a farm, and must admit I like the noise and smell of our dualie when I crank her up.

        • christoj879 says:

          @Whiskey Tango Foxtrot: You can get diesel engines in passenger vehicles – 80′s Mercedes Benz cars are pretty popular for it, as well as the Jetta. However, I’ve read and believe that a big reason is simply America thinks they’re dirty. If you get a single drop of that on your hand while fueling (and you do, if not from a drip then from handling the pump and fuel cap) you smell for a long while, everything you touch smells, and on most except for the new clean diesels (right now Jetta and soon the Accord) there’s some black smoke that nobody likes to see. Also people haven’t forgotten the fun of cold weather and a diesel. When diesel engines get out of tune they get louder, and most are pretty loud to begin with – people don’t seem to like the “diesel knock.” A lot of the problems of the old diesel have been solved but perceptions remain.

    • Squeezer99 says:

      @ThatIdiotJeffrey_GitEmSteveDave:

      in a 55 gallon barrel of oil, 42 gallons of it is gasoline. the rest of it is various other hydrocarbons. diesel comes out of oil before gas because it distills at a lower temperature then gasoline.

  3. usa_gatekeeper says:

    I just paid a relatively-speaking low (~$2.00/gallon) price for 130 gallons of home heating oil (untaxed “diesel fuel”) delivered today in Massachusetts. Some dealers are quoting as low as ~$1.75/gallon. It’s hard to reconcile talk of high diesel fuel prices at the pump with such low heating oil prices. What gives?

    • ThatIdiotJeffrey_GitEmSteveDave says:

      @usa_gatekeeper: As TEW says below, emission standards for trucks are different than they are for your furnace.

      It is also untaxed, which saves you. You also use less of it to heat than you do w/natural gas.

      • christoj879 says:

        @ThatIdiotJeffrey_GitEmSteveDave: Untaxed, (they’re probably not doing it now because of price) I’ve heard some mix kerosene, and I would venture that no heating oil is ultra low sulfur = less refining, so don’t put it in your new Jetta TDI :)

  4. TEW says:

    @USA gatekeeper
    Heating oil and diesel at the pump are two different things. In certain states the diesel needs to be refined so much that it forces the price up.
    @Kc2idf
    Ethanol is very cost ineffective and it is subsidized heavily. The states have been targeting diesel with high taxes because the trucks use it. I would buy a diesel car because they last longer and get better MPG’s but the taxes a high for the state.
    @FortyMegaFonzies
    Is that federal, state, local or just federal? I remember reading that with all of the taxes your total taxes is $.60-.70 per gallon depending where you live. When you look at the profit the oil companies are making per gallon the feds make far more off oil.

  5. Stitchopoulis says:

    At the station near me, diesel is currently about 15 cents cheaper than regular unleaded.

    Add the mileage I get from it, and I am a happy driver. The only downside is as the weather warms up and the rain subsides, I’m spending less and less time on 4 wheels. Maybe I should just get some barrels and stock up.

  6. FortyMegaFonzies says:

    @TEW:

    In Michigan, gasoline is taxed at 54.4 cents/gallon, while diesel is taxed at 60.3 cents/gallon — this includes *all* taxes, even sales tax. It varies state by state, but this is pretty representative. Given that diesel is only taxed trivially higher than gasoline, I don’t really understand the headline’s assertion that taxes are the main reason for the higher cost of diesel.

    –data from http://www.michigangasprices.com/tax_info.aspx

  7. TEW says:

    @FortyMegaFonzies
    “After crude oil costs, taxes are the second largest contributor to the price paid at the pump. Together Federal and State excise taxes on fuel account for an average cost of approximately 62 cents per gallon”
    –data from http://www.michigangasprices.com/tax_info.aspx
    In some states the taxes are $.19 higher for diesel. Also less people use diesel and the mega stations sell gas at a loss to get you into the store. The mega stations don’t sell diesel because there is not as much of demand. You also figure that they need to refine the diesel to make it pass emissions standards as gas has subsidized ethanol.

  8. ShadowWylde says:

    i find it strange that diesel now costs more than gasoline. i remember back in the late 1970s people were purchasing diesel volkswagens because the price of the fuel was significantly less than that of gasoline and the mileage was better.

    i know people who purposefully made such vehicle purchases. they were proud to show off their new cars while the rest of us were watching our paychecks get eaten at the pump.