Why is diesel cheaper than gasoline?

CFA123

Silver
May 29, 2004
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In U.S. diesel is 1.25% higher than gas. this week, diesel is $4.06 per gallon, gasoline $3.96.
In D.R. diesel is 10% cheaper than gas. this week, diesel is RD$189 per gallon, vs gas at RD$209.

Anyone know why that is? Pichardo?

FYI... in U.S.
Gasoline price = 68% crude oil, 13% refining, 7% distribution and marketing, & 12% taxes
Diesel price = 62% crude oil, 15% refining, 11% distribution and marketing, & 12% taxes

sources of price info:
Gasoline and Diesel Fuel Update
DiarioLibre.com - Portada
 

ben jammin

Well-known member
Aug 3, 2007
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i'm thinking the refining process in the states includes some extras to protect air quality that is absent in the DR. diesel used to be cheaper than gas in the states also.
 

belmont

Bronze
Oct 9, 2009
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Fuel prices in the DR are set weekly by the government. As fuel imported into the DR from mostly Venezuela is on credit, fuel prices may or not reflect the true market rates. I am sure they set diesel fuel prices lower than gasoline as the major user of diesel is the trucking industry with a very strong union influence over the government.
 

Frydaddy

New member
Sep 19, 2010
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Short answer - in the US - it's supply and demand. The decline in US refinery capacity and the increase in prices lead to the government to change it's policy and allow the import of refined gasoline. IIRC you still can't import refined diesel fuel. The chart/page Net Imports of Crude Oil into the U.S. by Country implies this, as lot of petroleum products are listed, but not diesel.

While imports of gasoline is comparatively very small to the total volume; they are at the margin of actual demand, and tend to have a larger than expected affect on the price. (1-2% supply change having a much larger % change in prices) Production costs on Diesel are lower than gasoline, but since the relative demand is higher - the prices are higher.
 

Criss Colon

Platinum
Jan 2, 2002
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yahoomail.com
The DR Government FEARS The Transport Unions!

Sooooooooooooo they subsidize "GasOil"(Diesel),and "Gas"(Propane).


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wrecksum

Bronze
Sep 27, 2010
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In many countries outside the US most commercial vehicles are diesel powered, for example in Africa all trucks are diesels and most European carriers use diesel, so consequently a change in the price of commercial diesel will affect the total cost of living more than a raise in gasoline prices, therefore many countries try to control the price of diesel due to political and commercial pressure.
Thus, in many of these countries Diesel is cheaper or the truckers have access to cheaper 'Pool' fuel.
The trucking companies are very powerful all over the world and I would imagine that here in the DR many influential figures would be involved in transport as well which could help influence the price.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
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Short answer - in the US - it's supply and demand. The decline in US refinery capacity and the increase in prices lead to the government to change it's policy and allow the import of refined gasoline. IIRC you still can't import refined diesel fuel. The chart/page Net Imports of Crude Oil into the U.S. by Country implies this, as lot of petroleum products are listed, but not diesel.

While imports of gasoline is comparatively very small to the total volume; they are at the margin of actual demand, and tend to have a larger than expected affect on the price. (1-2% supply change having a much larger % change in prices) Production costs on Diesel are lower than gasoline, but since the relative demand is higher - the prices are higher.
Somewhat true, but not all diesel is the same.

Diesel is processed in the states to remove a lot more sulpher (air quality.) That alone has increased the cost of the diesel product separate from the demand aspect.
 

CFA123

Silver
May 29, 2004
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So, in DR...Toyota Prado diesel or gas?

diesel Prado seems to be at premium price vs gasoline prado
 

jrjrth

Bronze
Mar 24, 2011
782
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Supply, demand and summer mix in the states

Prices are always fluctuating depending on the supply and demand, in the US we have to stand to a higher clean air emmissions level. Typically in the summer months the gasoline cost increases due to what they consider a Summer or Seasonal Mix, it reduces the amount of evaporation in the fuel that may cause volitility in the gasoline as the tempuratures heat up, there are difference RVP depending on region due to fluctuating temperatures across the US, the refineries actually have to shut the plants and convert over to different equipment for this process, then again in the Fall this process happens again....