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I have never understood why diesel and or heating oil is higher than gasoline.

One way to think about it is to understand that gasoline and diesel fuels live in “separate markets”, and there is strong demand in the “diesel market” right now. There is a certain amount of diesel refining capacity around the world, and once diesel demand hits this limit, prices can rise quickly. Strong diesel demand is driving up prices for diesel faster than gas right now.

also allot of the diesel demand like the the trucking industry can't have its gallon demand reduced quickly... no matter what the price of the gallon of diesel is.

gasoline on the other hand... when price goes high... people cut out some of that extra driving which reduces the demand for the gallon ...

So one demand can only change slowly not matter how fast the price changes... but the other can change the demand as fast as public opinion changes.

From what I understand of refining: the north american refineries manipulate the process to favor the output of gasoline. You'd think that each barrel of oil would produce a few heavy products, many medium-heavy products, and a few light products, but gasoline is something like 2/3 of the end product.

Yeah I've heard that as well about our refineries adjusting their processes to favor gasoline. I saw one report about fuel production in the UK, and yields for diesel and gasoline were very close, which matched the demand relatively closely.

As for the diesel vs gasoline prices, I'm not entirely certain what makes diesel cost more. In most areas in Manitoba that I visit, they are usually within 10% of each other. Sometimes diesel is more expensive and sometimes gasoline is. Maybe we don't have much demand here? But that is hard to imagine with all the heat needed in winter and all the farm implements running in summer.

I also heard that the EPA mandate for ultra-low sulfer diesel means that they have to use very light, sweet crude to make diesel. Thus, they always have to use the most expensive crude on the market.

There are some "alternative options" for usage of the crude that gets turned into diesel.
I believe it's competing with both kersone and jet fuel, and probably some other products I'm ignorant of.

Yeah I've heard that as well about our refineries adjusting their processes to favor gasoline. I saw one report about fuel production in the UK, and yields for diesel and gasoline were very close, which matched the demand relatively closely.


I don't know the details of the different refining systems but I've heard that the US refineries don't have the equipment to produce more diesel like European refineries, and the European refineries can't easily produce less diesel. We've designed around gas, they around diesel.