Why Does Diesel Fuel Cost More Than Regular Unleaded?
The cost difference between diesel and regular unleaded fuel has puzzled many consumers. While diesel has traditionally been seen as a byproduct of the refining process, its current pricing is influenced by several factors, including stringent emissions standards and taxation. Let's delve into the details to uncover why diesel fuel is more expensive.
1. Emissions Standards: The Evolution of Diesel Fuel
Traditionally, diesel fuel was a simpler byproduct of the refining process. Originally referred to as Fuel Oil, it was subject to minimal processing and defined primarily by physical tests such as distillation curve, flash point, viscosity, and specific gravity. However, as emissions standards tightened, diesel fuel underwent significant transformations.
Firstly, diesel fuel transitioned from being low sulfur to ultra low sulfur. Accompanied by advancements in engine design, this clean-up process involved the removal of various impurities. This process required additional refining steps and the use of precious metal catalysts, which are expensive and operated at high temperatures and pressures. These actions significantly increased production costs.
2. The Additional Costs of Refining: Lubricity and Tax Implications
Ultra Low Sulfur Diesel (ULSD) is the current standard, and its production demands additional refining measures. One primary concern is the reduction in lubricity, a property that is essential for the operation of fuel injection pumps in diesel engines. These pumps are extremely expensive, and diesel fuel provides a critical lubrication function to protect the pumps from wear and tear.
Moreover, the production standards must ensure backward compatibility, allowing older diesel vehicles to continue functioning with ease. This means maintaining sufficient lubricity in fuels refined from various vintage diesel stocks. Due to the long lifespan of some diesel vehicles, this requirement introduces an additional layer of complexity and cost to the refining process. Additional refining steps are necessary to meet these standards without compromising the lubricity of the fuel.
3. Taxation and Infrastructure Wear and Tear
In addition to the cost of refining, the cost of diesel fuel is also influenced by taxation. Large commercial trucks using diesel fuel are responsible for significant wear and tear on roads. Consequently, diesel fuel is often taxed at higher rates compared to unleaded gasoline. This tax is intended to fund road maintenance and infrastructure improvements, further contributing to the higher cost of diesel fuel.
Conclusion
The higher cost of diesel fuel compared to regular unleaded fuel is a result of several factors: stringent emissions standards, additional refining steps to maintain lubricity, and higher taxation. Consumers should understand these underlying reasons when comparing the costs of different types of fuel to make informed decisions.
Today, in a city like Adelaide, you might see diesel fuel prices fluctuating. For instance, in current observations, diesel was observed at 1.79 per liter, equivalent to 6.76 per U.S. gallon, while unleaded gasoline was priced at 1.69 per liter, or 7.52 per U.S. gallon last week.