Around here the price of gasoline has drifted into the $1.10/litre range (somewhere near $4/gallon, I think, for an American gallon... but we're in Canada). As petroleum prices have increased, so have gas prices and diesel too. This I know, but I haven't been *tracking* diesel prices.

I'm going to ask a naive question: has the price of diesel, volume for volume, risen at pretty much the identical rate as that of gasoline over, say, the last 18 months? Are the percentages of increase virtually the same?

I'll appreciate the feedback. Trying to figure out if the cost increases of the two fuels are "locked" together. Thanks.

Joel

When I bought my first diesel in 1999, fuel was around 90 cents a gallon (so about 25 cents a liter), about two-thirds the cost of a gallon of gasoline at the time. Now diesel costs about what regular unleaded gasoline costs (a little higher in winter, a little lower in summer, but lately not cheaper even when traditionally it should be). So I believe it has gone up in price faster to catch up to gasoline prices.

I've heard hundreds of explanations for this. The one I find most plausible is that there is greater demand for both gasoline and diesel fuel, so more gasoline than diesel is being made from a barrel of crude oil. This constriction in the supply of diesel drives its price up. There's no huge cry about this, though, because most buyers of diesel fuel (truckers, home-fuel-oil dealers, airlines [Jet-A is closely related to diesel fuel], etc.) are fairly inelastic in their demand but they can pass the cost increase on to customers. Most buyers of gasoline can't pass on a higher cost of fuel and keeping the price of gasoline low is politically popular. So there we are. *sigh*

The saving grace of it is that diesel engines are more efficient than gasoline engines. So even though my fuel costs what yours does, the fact that I'm getting half-again the mileage makes a big difference.

J.