Why is the price of petrol less than diesel, as diesel is less refined than petrol and should cost less?

Answer 1

The production costs are similar.
They are separate fractions of crude oil (diesel is not "less refined" in terms of processes, but in terms of molecule size - it contains molecules with about 10 carbon atoms each, whereas petrol averages 8 carbons per molecule), so the amount of each you can get from a certain amount of crude oil is fixed.

There are two issues that govern the relative prices - demand vs supply, and taxation.

There is slightly higher demand for diesel than for petrol in Europe - 50% of new cars in Europe are now diesel powered, along with about 95% of commercial vehicles, and a considerable amount of buses and trains. Add demand from shipping, agricultural machinery and as a domestic/industrial fuel (if you have an oil-fired boiler to heat your home, the fuel it uses is effectively a form of diesel), and you can see that there is little chance of oversupply leading to low prices.

In many European countries the tax on diesel fuel is lower than on petrol, to stimulate demand for more fuel-efficient diesel cars, and to support farming and haulage.
The UK government doesn't care so much about farmers or hauliers, and takes the view that as each litre of diesel fuel contains more carbon than each litre of petrol (remember the molecules mentioned earlier), it should be taxed higher - effectively you pay tax for the carbon you release into the atmosphere, not the amount of liquid fuel. For the same reason LPG and CNG (even fewer carbon atoms per molecule) are taxed less than petrol.

As diesel engines are more efficient than petrol engines, at higher usage rates (i.e. larger vehicles, or high annual mileages) a diesel vehicle still costs less to run, but at lower mileages in smaller cars a petrol car may be the more cost-efficient choice.

Answer 2

Good question! Could it be related to the announcement last month that low sulphur fuel is now required? As I understand it the low sulphur fuel mixture requires a higher temperature for ignition.

I notice the lowest prices at truck stops and used to see diesel selling close to the price of mid-grade gasoline. However, lately it is staying at or above premium gasoline prices.

Perhaps gasoline prices fell because of falling demand for gas since summer is over.

But I agree, that diesel should fall further!

Answer 3

because it was cheaper and everyone went out a bought a diesel engine thinking it would be more cheaper to run, the government said " wait a minute, we cant have that! so they put the price up, what they will say on record that diesel is more damaging to the enviroment so we are trying to reduce the amount of diesel used by putting the price up. we will see when cars mainly run on electricity, that will go up aswell ! they wont have an answer fo rthat one the tight fisted con merchants robbing bar stewards

Answer 4

From what I understand, gas is priced in step with BTU. on condition that diesel is larger in BTU content textile, it quite is greater costly. the hot emission controls on diesels have decrease pollution down notably, notwithstanding it does pollute greater. to date as farmers are worried, states generally decrease or get rid of a few of the tax on any gas used entirely for farm purposes. i'm undecided if all states have the comparable help value nevertheless. there is likewise a discounted value for gas used for boats. the two way, the suitable workplace work must be filed and submitted to the state(s). it is what i've got got here across for Nebraska; " seventy seven-2704.13 gas, capability, or water factors; exemption. sales and use taxes shall no longer be imposed on the gross receipts from the sale, hire, or condominium of and the storage, use, or different intake in this state of: (a million) sales and purchases of electricity, coal, gas, gas oil, diesel gas, tractor gas, propane, gas, coke, nuclear gas, and butane while greater desirable than fifty p.c. of the quantity offered is for use at as quickly as in irrigation or farming; "

Answer 5

It's much cheaper everywhere else other than, not just England, but the rest of the United Kingdom! (for those who think England is Britain!!) Scotland, Ireland and Wales. The United Kingdom probably has the highest fuel taxes anywhere!

Answer 6

1. Charge what the market will bear 2. Tax

Answer 7

Because their are more and more diesel cars so the goverment can make more money .

Answer 8

all to do with marketing and the pricing of a product, it costs what people will pay

Answer 9

Please specify where you are from. In many countries Diesel is far cheaper than petrol.

Answer 10

It is cheaper every where other than england.. its all down to tax