Why is the diesel & petrol price gap more than 13p?

badboybill

Over 15 months ago both diesel & petrol prices had a price gap of between 2/3p depending on where you purchased your fuel at 84/87p a litre.

As the oil price is around the $52 a barrel and has been for nearly a month. Why has the diesel price remained artificially high?

Have I missed some hidden stealth tax? Has this government made a deal with the Oil companies?

I don't know myself so I await your amusing responses :rolleyes:

TiTheRev

It's probably why so many fill up with petrol even when they've got a diesel

Aldridge_Andy

It's probably just money-making from all of us that borught a Diesel Car for lower costs, thanks to better fuel economy.

Most people would now probably be better off with a petrol car regardless, but diesel's are just nicer to drive with all that torque.

Conor_3

badboybill wrote: »

Over 15 months ago both diesel & petrol prices had a price gap of between 2/3p depending on where you purchased your fuel at 84/87p a litre.

As the oil price is around the $52 a barrel and has been for nearly a month. Why has the diesel price remained artificially high?

Have I missed some hidden stealth tax? Has this government made a deal with the Oil companies?

I don't know myself so I await your amusing responses :rolleyes:

There isn't the manufacturing capacity for diesel that there is for petrol. Diesel is also used in other things than road vehicles. It powers plant equipment and is also used as heating oil. At this time of year, the demand for heating oil is high, putting pressure on supply of fuel for road use and thus keeping the price higer.

redux

I reckon there is anti-competitive price-fixing on diesel

In most countries, diesel is cheaper than petrol due to lower duty, but there was a time in the summer when it surpassed the petrol price

But this disappeared weeks ago, and diesel is now cheaper than much of the time in the last 3 years - 90 or 91 cents in Belgium and Luxembourg at the moment, compared to 95 cents

When diesel was 84p here, it was the equivalent of 66p over there, so 18 pence cheaper than us

Now the exchange rate is different, so 90 cents is 72 pence, but that is over 30 pence cheaper.

Not all of the UK price is currency-linked, as it's refined here, so we probably should be paying about 16 or 18 pence more than B and L, or 88 to 90p

badboybill

Thanks for the replies..

The world today is far cheaper then 3 months ago if not 2 years ago. The Oil companies have slashed output by a third in a desperate attempt to stabilise the oil price and that is failing. Hell even Russia is worried slashing both taxes and prices.

Given these facts and what has already been said by previous posts do you honestly know, not think, that currency and production are responsible for an average 13p gap between diesel & petrol. Remember demand for diesel was considerably higher 2 years ago then in the last 3 months and the gap difference then was an average of only 2p.

Thanks

Hintza

I raised this a week or so back. I agree, I think the main reason currently is petrol prices grab the headlines and are quoted by the press whilst diesel prices do not. I suspect petrol is slightly lower than it should be and is cross subsidised by diesel. Tales the heat off the oil companies a bit but I think one of the motoring organisations should be asking this question very loudly.

thescouselander

The reason is that when the refinery splits the oil into its various fractions there is an optimum ratio of diesel to petrol that can be extracted from the crude oil. Also Diesel is a popular fuel in Europe so there is high demand (and its growing) so that combined with the fact that it will be more expensive to get more diesel out of the oil means the price for diesel is higher.

The americans have the opposite problem, they have too much diesel and not enough petrol. The EU were trying to strike a deal with the Americans where they would swap our petrol for their diesel. I'm not sure how they are getting on with that but in the mean time I would expect the price differential to get worse as more people start buying diesel cars.

badboybill

thescouselander wrote: »

Also Diesel is a popular fuel in Europe so there is high demand (and its growing) so that combined with the fact that it will be more expensive to get more diesel out of the oil means the price for diesel is higher.

Thanks for the reply.....are we then looking at the possibility that diesel will become obsolete within a decade? If the US doesn't want it and the European market is having its price marked-up to compensate for the demand, as well as refinement, then as soon as the gap price gets close to 20p then the economic benefits of diesel will be nullified.

The next thing that will happen is that duel fuel vehicles either electric or LPG will be sourced and exploited. Either-way the consumer won't take long to work things out and leave the oil companies with expensive fuel sitting in storage tanks because they tried to exploit demand instead of getting the balance right

goldspanners

badboybill wrote: »

Thanks for the reply.....are we then looking at the possibility that diesel will become obsolete within a decade? If the US doesn't want it and the European market is having its price marked-up to compensate for the demand, as well as refinement, then as soon as the gap price gets close to 20p then the economic benefits of diesel will be nullified.

The next thing that will happen is that duel fuel vehicles either electric or LPG will be sourced and exploited. Either-way the consumer won't take long to work things out and leave the oil companies with expensive fuel sitting in storage tanks because they tried to exploit demand instead of getting the balance right

i think theres a much bigger picture to this than meets the eye.

Bob63

thescouselander wrote: »

The americans have the opposite problem, they have too much diesel and not enough petrol.

So why is diesel much more expensive in the USA than petrol? In Colorado and Wyoming last week I was paying $1.64 / US gallon for petrol but diesel was closer to $1.90.

My understanding is that diesel is more expensive to produce than petrol meaning that if fuel duty is equal then it will always be more expensive than petrol. Countries like Belgium and Netherlands have lower taxes on diesel to encourage more people to use it - hence the lower price there.

EDIT: Just found this, which backs up what I just posted - http://www.petrolprices.com/why-diesel-costs-more-than-petrol.html