Exploring the Reasons Why Diesel Fuel Costs More Than Regular Fuel
In recent years, many drivers and fleet owners have noticed a significant difference in the cost between diesel and regular (petrol) fuel. This article delves into the primary reasons behind the higher cost of diesel fuel, particularly focusing on the changes in fuel refining and taxation.
Refining Process and Emission Standards
The first and foremost reason for the increased cost of diesel fuel is the significant changes in the refining process and the stringent emission standards that have been implemented.
A Historical Overview of Diesel Fuel
Traditionally, diesel fuel was nearly identical to another form of fuel oil, defined primarily by a set of physical tests, such as the distillation curve, flash point, viscosity, and specific gravity. It went straight from the distillation tower to storage tanks with minimal processing.
The Shift to Cleaner Fuels
As stringent emission standards were introduced, diesel had to evolve significantly. This involved a combination of advanced engine design and tighter specifications on fuel composition. Diesel underwent transformations from low-sulfur to ultra-low-sulfur, with many impurities being eliminated to meet these stringent standards.
This cleaning process required additional refining methods, often at high temperatures and pressures, using precious metal catalysts. These processes are not only complex but also costly, leading to a rise in the diesel fuel price.
Refining Process and Lubricity
A crucial aspect of diesel fuel that contributes to its higher cost is the need to maintain lubricity. High-lubricity diesel fuel is necessary for the operation of costly injection pumps, which rely on the fuel for intrinsic lubrication.
Ensuring Backward Compatibility
Manufacturers and refiners must ensure that the lubricity standards are maintained to support the compatibility of older diesel engines, many of which can last for decades. Thirty-year-old trucks and tractors are still operational and must run on modern diesel fuel without issues. This requirement adds an additional layer of complexity and cost to the refining process.
Taxation and Usage Patterns
Another significant factor in the cost of diesel fuel is the taxation. Diesel fuel is often taxed more heavily than gasoline, especially in areas where diesel is predominantly used by large commercial vehicles, which can significantly damage road surfaces.
Tax Fluctuation
To illustrate, in some regions like Australia, both diesel and petrol prices fluctuate, sometimes making diesel cheaper and other times more expensive.
Current Cost Comparison in Adelaide
For example, in the city of Adelaide, diesel fuel currently costs 1.79 per liter (6.76 per U.S. gallon), while petrol (gasoline) is priced at 1.69 per liter (6.51 per U.S. gallon). However, a few weeks ago, the prices were the same for both fuels, with petrol costing 1.99 per liter (7.52 per U.S. gallon).
In summary, the cost of diesel fuel today reflects the investment in refining processes to meet stringent emission standards and ensure backward compatibility with older engines, as well as higher taxes on diesel, reflecting its use in heavy commercial vehicles. Understanding these factors can help drivers and fleet owners make more informed decisions about their fuel choices.