Diesel fuel prices in the U.S. are rising dramatically—much more so than gasoline prices. That’s putting economic pressure on agriculture and other key industries—but the reason why has as much to do with chemistry as it does with supply or demand.
As of Thursday, the average diesel price in the U.S. is $6.5141 per gallon, roughly a cent lower than the all-time historic high set on Tuesday, according to American Automobile Association (AAA) data. Experts believe that unless something dramatic happens in the ongoing wars in Iran and Ukraine, the price climb is likely to continue.
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The reason diesel is more expensive than gasoline involves a combination of geopolitics, as well as the chemistry of the product itself.
Both gasoline and diesel are made from crude oil, but their chemical makeup differs in several ways. Diesel’s chains of hydrocarbons—organic compounds made up of hydrogen and carbon atoms—are longer, which makes the fuel around 20 percent more efficient than gasoline, explains Robert Farrauto, a professor at Columbia University’s department of Earth and environmental engineering.
“That’s the reason truckers use diesel,” Farrauto says. “You get much better fuel economy because it uses less fuel, because the molecules are bigger. You get more energy, which means you need fewer hydrocarbons in mixture with air in order to get mileage.”
The process needed to refine diesel is more intensive, however. That’s because of the type of oil used in its production. Unlike gasoline, which is primarily made out of “sweet crude”—a high-quality oil with relatively few impurities and shorter chains of hydrocarbons—diesel is made out of heavier oil with longer hydrocarbon chains, such as those produced in Canada’s tar sands or Venezuela’s oil fields. This can come with high levels of metals such as nickel and vanadium, which can damage engines, and sulfur, which can be poisonous to people. Because of environmental regulations, those contaminants need to be removed during refining.
“It’s called a sledgehammer-type process, where you have high pressure, high temperatures, and you break the nickel and the vanadium and the sulfur, and you get rid of them, but you also break a lot of the molecules,” Farrauto says.
Because so much material is removed, the amount of diesel fuel produced from a barrel of oil is lower than the amount of gasoline that can be produced from that barrel—that’s part of why diesel is so much more expensive than gasoline. But economic pressures are driving up the price even more, says Gregg Ibendahl, an associate professor of agricultural economics as Kansas State University. Gasoline prices have gone up about 40 percent over the past 12 months, whereas diesel prices have nearly doubled over that time, according to AAA. That’s because gasoline is more elastic, fiscally speaking, than diesel.
“People still drive a lot when gas prices go up, but consumers do vote with their pocketbook, and they will cut back on trips and stuff,” Ibendahl says. “When it comes to diesel fuel, though, it’s not that way at all. Diesel price is $2.50 higher than what it was in spring, but that’s not going to stop a single farmer from running their combine out there.”
While most diesel consumed in the U.S. is refined domestically, and the country produces a surplus, the fuel is still affected by global economic forces. Oil supplies coming through the Strait of Hormuz remain down as a result of the war with Iran, while Russia, a major diesel producer, has largely stopped making the fuel after Ukraine struck several refineries.
Biodiesel, which is produced from sources such as vegetables rather than petroleum, exists, but its share of the diesel market is far too small to influence overall pricing, Farrauto says.
“The bigger issue there is that vegetable oils are also a food source,” he says. “If you start using too much biodiesel, then what that means is that you’re not feeding people.”
If the Iran and Ukraine wars drag on, Ibendahl says, diesel prices are likely to stay above $6 a gallon “for quite a while.” Reports that the U.S. government may or may not be preparing to implement a 90-day export ban aside, that would be unlikely to have much effect on prices, Ibendahl adds, because global supplies remain tight.
“Companies like Walmart and the trucking companies and such are going to try to absorb that as much as they can, but eventually, they’re going to pass those costs on to consumers,” he says.
