The Diesel Fuel Price Difference

Thursday, September 21st 2006, 10:08 am
By: News On 6

Prices at the gasoline pump continue to drop. Those falling prices are welcome news for drivers, but folks who drive diesel vehicles are wondering when they will see significant savings?

News on 6 anchor Craig Day says Mark Gibson owns a siding company. He spends a lot of time on the road, 3,000 to 4,000 miles a month. "Mayes County to right now, working at Collinsville, to Tahlequah, down to Muskogee, Bixby, Jenks, Tulsa. All the northeast part of the state."

Every time Gibson drives his big pickup to a job site, he does a double take when he sees gas prices dropping, but diesel prices still about 30 cents higher. "It's not dropping as fast. And you know why? I know there's got to be a reason."

There are several reasons why. Mark Madeja is with AAA. “Well blame it on supply and demand, and right now, demand is high and supplies are very, very tight." Madeja says there are more diesel operating vehicles being produced worldwide which has impacted diesel consumption.

Gas prices usually drop this time of year, when the summer peak driving season is over and supplies aren't as tight. But that isn't the gas with the supply of diesel, which remains more constant because of the fuel needed in the trucking industry.

Refineries are working right now to meet new EPA diesel standards, which require lowering sulfur levels by October 15th. Mark Madeja: "Industry analysts say right now, diesel prices are going to remain high for probably the next month or so. But once the refiners are able to produce these new EPA blends, the prices should start to fall back."

Although the price of diesel has dropped some in the past month, Gibson hopes it drops even more, which would be good news to his wallet. “In reality, back down to, if it would get down to the two dollars a gallon and stay there, it would be a lot better."

Another reason the supply of diesel is tight right now is that refineries are producing less diesel, in order to make more heating fuel for many people living in the northeastern United States.