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Yes, diesel used to be cheaper than gasoline

The trend changed, when diesel demand increased, and emissions standards on sulfur became stricter.

GREENSBORO, N.C. — Gas prices are 'pumping' out some stability lately, though nationwide, they remain much higher than this time last summer.

Diesel prices still top $5, more than a dollar above regular, so let's get the 'dirt' on the disparity.

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THE QUESTION

Viewer Kenneth Craven asked, "Why is (the) diesel price higher than gasoline? Many years ago, diesel was much cheaper...because it supposedly was the leftover product of refining."

So, is it true diesel used to be more expensive than gas?

THE SOURCES

THE ANSWER

True. In the early 2000s, changes to demand and fuel emission standards made the historically-cheaper diesel fuel more expensive than gasoline. The trend likely won't change in the foreseeable future.

THE PROCESS

EIA data shows diesel prices below $2 before 2005, but a steady incline since then. Prices peaked in the 2008 and 2022 economic downturns.

In the early 2000s, EIA explained, the average diesel price often was lower than regular gas, except during really cold winters when consumers used distillate heating oil. Ever since 2004, three factors have flipped the trend:

  1. Demand for diesel increased throughout the world.
  2. Federal excise tax on diesel became six cents higher than that of regular gas.
  3. U.S. transitioned to ultra-low sulfur diesel (ULSD), affecting diesel production and distribution.

"If you'll remember, back in the 80s and 90s, diesel used to be sooty, and it would burn completely different. Now, there's a lot of clean diesel. Diesel has really cleaned up in terms of the specification, the sulfur content."

That's why, De Haan emphasized, diesel prices will remain more expensive than gas for the foreseeable future, and it's advantageous for manufacturers to keep producing diesel.

"Because, in essence, diesel -- which many used to consider a byproduct of trying to produce gasoline -- is not really a byproduct at all. In fact, refineries, in many instances, have been trying to produce more diesel than they have gasoline, because diesel prices have been higher," De Haan said.

Even though diesel is now the cleaner fuel option, it cannot go into regular cars. Most diesel pumps won't even fit into a standard car's gas tank, because putting diesel into a standard tank will destroy the engine.

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