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Page added on October 31, 2005

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Why are diesel, gasoline going opposite ways?

Though drivers who use gasoline have gotten a break at the pump in the last few weeks, the price of diesel fuel has hit record highs. That has a lot of readers asking: what gives?
DIESEL DILEMMA

Why is the price of diesel so high? Compared to the price at the pump in N.E. Colorado, regular unleaded is $2.55 and diesel is $3.49. Why is there almost a dollar difference? Running trucks and heavy equipment is so costly we should park them. Freight causes the price of everything to increase. Doesn’t it cost less to make diesel than unleaded?

I keep reading about market forces dictating the price of fuel, but I have difficulty making things add up. An example is the retail price of diesel fuel. According to the EIA, the average retail price for diesel fuel is about $3.15 per gallon. This is nearly $0.97 per gallon more than the same time last year. What I don’t understand is the fact that prices are so much higher than last year when distillate inventories are within the average range and are actually 3.7 million barrels higher than the same time last year. All the while, demand for distillates is down from 3.5 percent to 4 percent relative to last year. What gives?

MSNBC



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