Is a wheel of fortune used to set fuel prices?

Well it could be yes and no.

John C. Eberhardt

John C. Eberhardt

 

 

 

 

I couldn’t really think of any good reason why diesel prices have been so much more than regular gasoline prices since diesel has always cost less than gas before 2004.  I did some research on this to see what was what and the government says it’s because worldwide demand is gone up.  However, worldwide demand for gasoline has gone up as well, hasn’t it? Do you think it may have been because many more people use gasoline and were crying and whining about the prices?  Diesel is primarily used for business purposes such as mass transportation and transportation of goods and services. Businesses can complain but are generally stuck paying the price however high it may go.  The result of higher diesel prices and lower gasoline prices was that people paid a little bit less at the pumps but paid more for their goods and services.  So in the long run everyone ended up paying for it in one way or another.

But according to our government the real reasons are explained in this nifty U.S. government approved brochure below:

“Why are diesel fuel prices higher than gasoline prices?

Historically, the average price of diesel fuel has been lower than the average price of gasoline. However, this is not always the case. In some winters where the demand for distillate heating oil is high, the price of diesel fuel has risen above the gasoline price. Since September 2004, the price of diesel fuel has been generally higher than the price of regular gasoline all year round for several reasons. Worldwide demand for diesel fuel and other distillate fuel oils has been increasing steadily, with strong demand in China, Europe, and the United States, putting more pressure on the tight global refining capacity.

In the United States, the transition to ultra-low-sulfur diesel fuel has affected diesel fuel production and distribution costs. Also, the Federal excise tax on diesel fuel is 6 cents higher per gallon (24.4 cents per gallon) than the tax on gasoline.”

 Source: http://www.eia.doe.gov/bookshelf/brochures/diesel/

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