Diesel prices – a point of curiosity

June 11, 2016 by

I'm kind of a news junky, so I try to pay attention, but ...

Has the media missed reporting on something?  Or did I just miss the report on the news and across the internet?

There's one thing I noticed recently.  Diesel fuel prices are lower than regular gasoline.

diesel cheaper than gas 2 - blackedDiesel prices used to be 60-80 cents higher.

Diesel prices are important to many businesses.  They use vehicles which operate on diesel fuel to transport and deliver many items - like food, furniture, fuel, people.  For years, diesel fuel has cost more than regular gasoline.  Now, like all of a sudden, diesel is cheaper.

Why?

The prices for both types of fuel started to come down over a year ago when the Saudi's cut the price of crude - reportedly in an attempt to drive alternative energy sources out of business.  But diesel still remained higher.

When was the crossover point?

I've done some research, but haven't found any published specific answers for the current greater diesel price decline - even from the Energy Information Administration (EIA).

Prior articles said that
1) diesel prices were higher because of international demand/competition - China, India, etc.
2) diesel taxes are higher than for gasoline
3) the stricter EPA requirements for Ultra-Low Sulfur Diesel (ULSD)
4) an increased demand for diesel

The reduction is not due to reducing taxes on diesel fuel.
Maybe it's due to China's declining economy?
Maybe it's due to the fact that refinery costs to produce the lower sulfur fuel have been amortized?

Sounds like it would be worth investigating or reporting by some news entity - maybe MSNBC or some other business or financial news stations.

The EIA has published projections for both regular gasoline and diesel fuel toward the end of 2017.  Unfortunately, they used different price scaling on their charts, so it's difficult to compare where they think price comparisons will go.
gas & diesel projections combined

If anyone knows when and why the crossover occurred, please let me know.  I'm curious.

P.S.  Sorry.  I don't know why the images shown are blurred on the post. My copies were perfectly clear .

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