Diesel prices top gas by 56 cents a gallon nationally

Diesel has become more expensive than gas, and that all but eliminates the savings from diesel's generally higher efficiency over gasoline.


Diesel fuel was once a less-expensive alternative to gasoline, but the roles have reversed in recent years. Diesel has become more expensive than gas, and that all but eliminates the savings from diesel's generally higher efficiency over gasoline.

The situation stems from factors including increased worldwide demand, bitter cold weather and an improving global economy, petroleum market-watchers say, and it has implications for anything that is shipped by truck or rail.

In other words, just about everything.

"(Diesel) is a big deal," said Jim Ritterbusch, an oil market industry analyst in Galena, Ill.

Across the United States on Friday, a gallon of diesel fuel cost $3.86, according to the AAA Daily Fuel Gauge Report. A gallon of gasoline was 56 cents cheaper at $3.30 a gallon. In Wisconsin, the difference was even bigger, with gasoline matching the national average price while diesel was averaging $3.91.

Consumers are increasingly paying attention.

"There are a lot more customers nowadays who weigh the pros and cons" of diesel vs. gasoline, said Brad Baker, a sales representative at Badger Truck Center in Milwaukee. "(Diesel) costs more. It never used to.

"More and more people are putting a pencil to it and saying, 'I can get by with a gasoline engine,'" he added. "We've gone through this conversation quite a bit the last three or four years for sure -- more than we used to.

"It's something we deal with every day."

There are nearly 50,000 light-duty diesel vehicles -- cars, SUVs and light trucks -- in Wisconsin, according to dieselforum.org, a trade association for companies that manufacture diesel-powered products.

Diesel vehicles are 30 percent to 35 percent more fuel efficient than gasoline-powered vehicles, according to fueleconomy.gov.

Right now, though, "All the gains you scoop up with the much better mileage, you are losing on the pump price," Ritterbusch said.

Higher global demand

Global demand for diesel is among the factors driving prices higher, with U.S. refineries often exporting the fuel wherever in the world it can fetch the best price. As Europe emerges from recession and developing countries in Asia and Latin America have continued to grow, so has demand for diesel.

"Diesel exports have probably quadrupled in the past three or four years," Ritterbusch said. "It's almost a situation where gasoline has become a byproduct of this quest to produce diesel, load it on cargo ships and ship it out."

The U.S. exports about 3.5 times as much diesel as gasoline.

Ritterbusch said he's seen instances of diesel being shipped as far away as Asia.

Meanwhile, soaring heating oil use amid bitter cold temperatures this winter in the U.S. also has affected diesel, Ritterbusch said. Among refined crude oil products, heating oil is closely related to diesel fuel, and soaring home heating demands -- especially on the East Coast -- have led to higher prices.

"Diesel fuel is the pre-eminent fuel in the world now," said DuWayne Marshall, an independent trucker from Watertown. "When I started trucking, diesel was probably 20 cents a gallon cheaper than gasoline. But it's been on a steady climb since probably the late 1980s."

It's been worse. Diesel has fallen from its highest prices touched in 2008, he said, and it costs about $800 to fill his truck these days, compared with $1,000 a few years back.

He follows prices carefully. "I put a lot of thought into it," he said. "I have to watch my price per gallon."

As in other trucking and shipping businesses, fuel prices have forced Marshall to add fuel surcharges to every load he hauls.

The surcharges slide up or down depending on the cost of fuel.

American consumers ultimately pay those costs.

"The consumer bears much of the increase during a spike, and they receive the benefit of a drop in prices as well," said Dan McMackin, a spokesman for Atlanta-based UPS.

Volatility

The price increase also is part of a pattern that has seen volatile price swings occurring regularly in petroleum markets.

This content continues onto the next page...

We Recommend