Sunday, August 24, 2008

why are diesel prices so much higher than unleaded  


There must be some explanation. In our recent history, there hasn't been a time when diesel was so much more expensive than unleaded. Why has the markeplace changed so drastically.

I started looking into it, and I found what seems to be a rational explanation.

David Morris is the vice president of the Institute for Local Self-Reliance, and an expert on energy said diesel prices are soaring.

"Diesel is what gets the goods to market; diesel is what runs the factories. Gasoline gets us to the store work. But basically the economy runs on diesel in the United States," said Morris.

He said just like with regular unleaded, worldwide demand is outpacing supply. However, overseas they use a lot more diesel than unleaded.

"Globally we're having an increased demand for diesel, faster than an increased demand for gasoline and that is stressing refineries," said Morris.

Plus the U.S. has a new environmental requirement to get the sulfur out of diesel.

"So most people think that that alone has increased the price of diesel anywhere from 15 to 20 cents a gallon," said Morris.

What next?

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