There are a few reasons why diesel is much more than gas but supply and demand does play into the price. I can show you this by listing a few stations if you need me to.
Lets look at the wholesale level first. Regulations and refinery upgrades for Ultra low sulfur diesel and the fact that we can now sell diesel abroad drives up the wholesale price. This is a simple fact that you can not get around.
Some would say the demand for diesel is greater now since there are many more diesel pickups on the road but that has really tried to keep the price in check rather than driving it up more.
On the retail level diesel has a MUCH greater mark up that gas and the tax is more. Gas has a national average of 48.4 cpg tax while diesel has a 53.6 cpg tax average. Diesel is considered a business expense so states feel they can tax it easier and not pi$$ off the voting public. The higher markup on diesel is because of supply. Now before you go flying off the handle and say supply is there; I do not mean supply of diesel; I mean access to that supply from stations selling diesel. Most places that sell diesel are large truck stops. They need a large mark up to pay for these places and that holds the price of diesel up to Joe the diesel pickup owner.
Look at it this way......... A large truck stop has lets say .25 markup on diesel. They buy it for (just using #'s here) lets say 2.00 a gallon and sell it for 2.25 a gallon. That is a .25 markup and is really much more than any gas station markup would be. Now you open a mom and pop gas station across the street. You buy the same diesel so your cost is 2.00 a gallon. You could sell it at 2.05 a gallon and make as much as you do on gas but why would you. All your competition is selling it for 2.25 so you sell it for 2.22 This holds the price of diesel up at the retail level.
Another fact that you may or may not realize is big buyers of diesel such as Swift or Schneider do not pay pump price. They have contracts with big diesel truck stops like TA or Pilot to pay below pump price so this also allows the pump price of diesel to be inflated even more to Joe the pickup owner.
Right all this off as speculation or believe it as fact. Your choice.
If you would like me to explain how supply and demand affects price I can show you that.
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Today's Featured Article - New Life for an Old Allis - by Tyler Woods. My friend Jon, has an old '39 Allis Chalmers B. He thought it a marginal tractor that had long since served its time. She smoked terribly and never had much power but he couldn't afford another so he was limping along with what he had. Jon's Allis has a small front loader and though it doesn't carry much, it serves his needs. It was the hard starting and low power that made him think it was time to replace the old girl. Jon called me to help him discover why his tractor wouldn't start
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