While demand for traditional gasoline in the United States is on the decline, demand for diesel fuel has been relatively high in the United States and abroad, in Europe, China, and India.1
The transition to less harmful, cleaner burning diesel fuels in the United States and around the world affects diesel fuel production and distribution costs. American refiners are investing in upgrading operations to meet rising demand and comply with new, stricter air-quality standards. These costs are reflected at the pump. Refining, distribution, and marketing costs account for 54% of the price of diesel fuel versus 41% of the price of regular gasoline.2
The federal excise tax for on-highway diesel fuel is 24.3 cents per gallon. That’s 6 cents per gallon higher than the federal excise tax on gasoline.3
Home heating oil is made from the same components as diesel fuel. In the winter, when the demand for heating oil rises, increases in diesel prices tend to follow.
Diesel fuel prices have been higher than regular grade gasoline prices, on a dollar per gallon basis, almost continuously since September 2004.5