We have had many questions come in to the PumpTalk blog regarding diesel pricing and why they continue to be above gasoline prices. In this week’s post, we’ll help answer these questions.
First, I’d like to remind everyone that diesel has more than one use versus its sister, gasoline, whose primary use is transportation. This means that, unlike gasoline, demand for diesel is based on more than vehicle population. Diesel has many other uses in industries like in freight, construction, agriculture and ports.
Now let’s shed some light on pricing.
Interestingly enough, we have a post from 2008 which discusses the rise in diesel prices – and the reasons still hold true!
Along with an increase in global demand, Canada moved to selling only Ultra Low Sulphur Diesel (ULSD) in 2010 for all on-road and off-road diesel fuel (with the exception of rail and marine applications). ULSD is a much cleaner burning diesel. However, production costs are higher than regular diesel. This also plays a part in increased diesel prices.
We have a great post on how diesel has changed in the last 30 years here and how the move to Ultra Low Sulphur Diesel is having a positive impact for consumers.
So to sum it up, diesel prices have maintained their position above gasoline prices due to global demand and the shift to Ultra Low Sulphur Diesel (ULSD).
We hope this helps in answering your questions.
You can also learn more about ULSD on our website.
To learn more about diesel fuel visit you can also visit the below links: http://en.wikipedia.org/wiki/Diesel_fuel
- Julie S.