Written on: August 7, 2023
Diesel fuel can be more cost-effective for certain vehicles or equipment because diesel engines are more fuel-efficient than gasoline engines.
The price of diesel fuel can vary due to different factors. To get a better idea of the current diesel pricing, let’s take a closer look.
Diesel fuel prices can go up due to several reasons, including global demand, production costs, taxes, and government regulations.
Supply and demand: When the demand for diesel fuel goes up around the world, its price tends to go up too. This is because of factors like increased economic activity and transportation needs. Diesel fuel is likely to continue to be in high demand as the global economy keeps growing. Although there’s currently enough diesel fuel available to meet demand, supply issues caused by political tensions and other factors can cause prices to rise if supply gets tight.
Taxes and regulations: The cost of diesel fuel can be increased by taxes and regulations, which in turn makes it more expensive for consumers. Production costs can be affected by environmental regulations, safety regulations, or other types of regulations. The federal excise tax in the United States is higher for diesel fuel at 24.4 cents per gallon compared to gasoline at 18.4 cents per gallon. Moreover, certain states may have additional taxes on diesel fuel.
Refining, production, and distribution costs: Carrying out the process of converting crude oil into diesel fuel involves expenses such as refining, transportation and distribution. An increase in these expenses, for example due to maintenance or upgrades at refineries, can lead to an increase in diesel fuel prices. The cost of labor and other overhead expenses can also have an effect on the production costs of crude oil leading to a rise in diesel fuel prices. From 2006 to 2014, the Environmental Protection Agency (EPA) implemented stricter sulfur regulations for diesel fuel in order to lower emissions. The new standards say diesel fuel can’t have more than 15 parts per million of sulfur, which is a big reduction from the 5,000 ppm standard before 2006. This has helped improve air quality and the environment, but it has also raised the refining costs for diesel.
The current rise in crude oil prices is caused by a combination of increased global demand, supply disruptions, and geopolitical tensions. The recent weakening of the US dollar exchange rate has also played a role in raising diesel prices.
How will diesel customers be impacted? Diesel fuel is a mixture of refined crude oil and biomass materials. This means that the price of diesel fuel is linked to the cost of crude oil, since diesel fuel is created from refining crude oil. It’s important to note that the production of diesel from crude oil has a lower yield compared to gasoline. For every barrel of crude oil, only 11 to 12 gallons of diesel can be produced, while 19 to 20 gallons of gasoline can be produced.
As an Oklahoma business owner using diesel-powered vehicles and equipment, you understand the significance of having dependable diesel fuel delivery and services to avoid financial limitations and ensure the successful completion of all your work.
Although we do not have control over the factors that affect pricing such as production costs, taxes, and diesel demand, our on-road and off-road diesel fuel services can enhance the efficiency and productivity of your business, leading to improved profits.
Pitmon Oil & Gas is committed to building strong partnerships with our commercial customers. We believe in delivering more than just competitive prices by providing actual value. That’s why we offer hassle-free delivery of bulk diesel fuel directly to your business or job site.
Our local business specializes in diesel fuel services that are not available from larger national firms. We are dedicated to providing personalized and timely services. Whether you require emergency fuel delivery or need to modify your fuel supply, we are available to assist you.
Pitmon Oil & Gas provides dependable diesel fuel service at a great price! Contact us today for a consultation.
