Why is diesel more costly than petrol...

..when it appears to be easier to make. Crude oil is processed via a process called fractional distillation to create diesel and petrol. Diesel is actually easier to extract in this process and also takes less crude to produce per kg than petrol. So why is it more expensive? In order to meet emission requirements, diesel now requires further processing to remove sulphur, which increases the cost of production. However, the current difference is predominantly due to taxation, which on all fuel is approximately three quarters of the cost, with diesel being taxed slightly more per litre. Although the base price of diesel seems to fluctuate less than that of petrol, there are fewer diesel vehicles on the road than petrol driven, so market forces come into play for purchasing.

This is frustrating for diesel car drivers who on average are using less fuel overall than their petrol counterparts and doubly so for the transport industry when there are subsidies for diesel in many other countries with the UK paying some of the highest prices for fuel generally.

Richard SpencerComment