Average Price of Diesel Falls Below Regular Retail Gasoline for First Time Since 2009

August 25th, 2015 by Fiedler Group

For the first time in six years — since August 2009 — the average price of diesel fuel in the United States fell below the average price of regular retail gasoline.

Before this milestone event, retail diesel sold on average 34 cents per gallon higher than regular grade gasoline. Sometimes the difference was higher, for instance, when it reached more than 90 cents per gallon higher in January.

Until recently, diesel’s long running price premium was a reflection of strong global demand, federal fuel taxes (that are 6 cents per gallon higher than gasoline), coupled with the higher production cost for ultra-low sulfur diesel (ULSD).

While demand for gasoline across the last six years has generally been weak due to increasing personal vehicle fuel economy and evolving consumer driving patterns, demand for diesel has slowly grown due to adoption of the fuel from developing economies as well as the switchover to ULSD to heat homes in the northeastern United States.

This pricing anomaly is likely to be relatively short term however.

Based on the latest data from the Federal High Administration, Americans drove a record 987.7 billion months during the first four months of 2015, suggesting increased demand with the end of the summer driving season for gasoline. Plus, diesel demand will begin to grow in response to the fall harvest and winter heating season.

To learn more about Fiedler Group’s expertise in the retail petroleum industry, please contact us today.