At the pump, diesel fuel consistently costs more than regular gasoline — often by $0.30-0.50 per gallon. This pricing gap has structural causes rooted in refining economics, tax policy, and the global demand profile for distillate fuels.
Refining Economics
Diesel (No. 2 distillate) requires additional refining steps beyond gasoline production, including hydrotreating to meet ultra-low sulfur diesel (ULSD) specifications mandated since 2006. These extra processing steps increase production costs.
Tax Differences
Federal excise tax on diesel ($0.244/gallon) is higher than on gasoline ($0.184/gallon). Many states also levy higher diesel taxes. These tax differentials alone account for $0.06-0.10 of the retail price gap.
Global Demand Competition
Diesel demand is more globalized than gasoline. European transport relies heavily on diesel, and emerging market growth drives distillate demand faster than gasoline demand. This global pull on limited distillate supply keeps diesel prices elevated relative to gasoline in the U.S. market.