April 2nd, 2008
Hey, a drop’s a drop, right? (Data courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford dropped a fifth of a cent, remaining at $3.37 a gallon Wednesday. Most metro areas in the state also dropped, albeit slightly (except for Springfield, which dropped a whole three cents … party at Aaron Chambers’ place!). The state as a whole dropped almost a cent to $3.41. We’re tied for fifth in the state in highest gas prices. The national average remained virtually unchanged today at $3.29 a gallon. Illinois is tied for sixth-highest gas prices in the country.
Diesel: Rockford dropped a whole cent (golly gee wow) to $4.08 a gallon, while the rest of the state jumped around. The state average remained at $4.14 a gallon, and we’re fifth in the state in diesel prices. The nation increased less than a cent to $4.03. Illinois has the 14th-highest prices in the country.
April 2nd, 2008
I’ve gotten several calls that are basically variations on the theme, “If diesel fuel is cheaper to make, why does it cost more than gasoline?” The shift happened around 2004, according to the U.S. Energy Information Administration, and has only gotten worse. According to AAA’s fuelgaugereport.com, the nation’s average diesel prices were 16 cents higher than gasoline prices a year ago; Now they’re 74 cents higher.
The EIA takes a stab at explaining this:
Historically, the average price of on-highway diesel fuel was usually lower than or close to the price of regular gasoline. In some cold winters demand for distillate heating oil pushed diesel fuel prices higher. Since September 2004, diesel prices have been higher than regular gasoline prices almost continuously for several reasons:
- High worldwide demand for diesel fuel and other distillate fuel oils, especially in Europe, China, India and the United States, and a tight global refining capacity available to meet demand.
- The transition to lower-sulfur diesel fuels in the United States is affecting diesel fuel production and distribution costs.
- The Federal excise tax on on-highway diesel fuel is 6 cents per gallon higher (at 24.4 cents/gallon) than the tax on gasoline.
I know that’s little comfort for those feeling the pinch, but it’s at least part of the explanation. I think the first point - increased global demand - is a key all around.
Have a question about transportation related topics? Contact me at 815-897-1343 or tbona@rrstar.com and I’ll do my best to find an answer.
