I keep asking myself questions I don't know the answers to - it's shocking how much I don't know! Well, here's another one. Why is diesel more expensive than regular gasoline? I'm sure it used to be cheaper than gas, but now it's substantially more expensive.
Well, it seems there are at least three main reasons:
- Diesel is the main fuel used for shipping, trucking, farming and construction. Global demand for diesel has been particularly high in the last couple of decades, driving up prices. Diesel prices are particularly sensitive to shipping and maritime disruptions.
- The transition to less-polluting lower-sulfur diese, again over the last 20 years or so, and particularly in the USA, has required more intensive and more costly refining processes.
- Taxes on diesel are typically more than the taxes on gasoline.
There is also a seasonal effect, as home heating oil - which is quite similar to diesel and often produced together - sees peak demand in the winter, which has the effect of pushing up the price of diesel.
Either way, the price of diesel has indeed gone up substantially more than the price of gasoline since the Iran war - about 50% compared to 30-33%. And that, of course, will make everything else more expensive, given our calamitous over-reliance on diesel for transportation.
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