Why Do Diesel Fuel Prices Go Up?

Find Out the 3 Factors that Drive the Price of Diesel

Every spring, almost regardless of the weather, gasoline prices begin to go up. On top of the seasonal uptick, the price of crude oil has been rising as well, increasing fuel prices even more. And while the cost of gasoline often makes the news, it’s the price of diesel fuel that really affects prices across the economy. After all, it’s diesel that fuels most of the fleets that deliver goods, or are used in manufacturing, farming and more.

For large vehicle fleets, farms and other commercial ventures, the high price of diesel fuel is an aggravating reality of life. Diesel has on-road and off-road uses that make it indispensable for many businesses. But the cost of fueling up can really hit your bottom line.

What Drives the Price of Diesel Up?

There are three factors that contribute to the price of diesel fuel:

1. Production costs. A 2014 Environmental Protection Agency standard increased production costs for diesel fuels. This regulation requires all diesel fuel to limit its sulfur to 15 parts per million. This lowered diesel fuel emissions significantly, but it also raised the expense of refining it.
2. Taxes. The federal motor fuel excise tax is 18.4 cents per gallon for gasoline, but it’s 24.4 cents per gallon for diesel. States also impose higher taxes on diesel—and the state tax on diesel increased by 2 cents per gallon here in North Carolina. That’s a lot less than in other states, but those pennies add up with every fill-up.
3. Demand. Demand is always higher for diesel fuel. Freighters, tractors, trains, forklifts, construction equipment all need diesel to run, and that demand is steady. But one barrel of crude oil only produces about 11-12 gallons of diesel, compared to 19-20 for gasoline.

We Can Help Keep Diesel Costs Manageable

As a local, independent fuel company, we can’t do much to reverse the high taxes, refining costs, and other factors that drive up diesel fuel prices. But our commercial fleet-fueling services can help you save time and money. Our wholesale pricing and bulk fuel discounts can help you can save money on the fuel you need to run your fleet. And on-site fueling keeps your fleets on the road and on the job—rather than filling up at the gas station. Because you’re ordering fuel in advance and not just filling up when tanks hit empty, you’ll be able to more accurately track your fuel usage to reduce waste. You’ll also have a detailed invoice instead of just gas station receipts.

Our commercial and business partnerships are important to us, and that’s why we strive to deliver real value that goes beyond competitive prices. Our friendly staff has fuel management expertise that takes the stress and guesswork out of commercial fuel deliveries—and we provide heating oil and propane for our commercial customers too. We’ve got the experience to understand your needs and help you plan, schedule and manage your fuel deliveries.

We’re always here to take your call. Contact us today to find out how we can make doing business easier for you.