Why Is Petrol Cheaper Than Diesel?

By Wayne Truter

History has it that the gasoline prices have been higher than the diesel fuel prices. But then again, this does not always hold true. During some winters, the demand for distillate heating oil increases which also raises the price of diesel fuel?so much so that is becomes more expensive than gasoline.

If people were a tad ambitious or daring, we could go for something that has been proposed a few years ago as an alternative to diesel fuel -- water. First of all, it makes the car start and run. That's the most important thing we need to consider when dealing with alternative fuels. Second, it's inexpensive as compared to gasoline or diesel. Even if we say that gasoline is cheaper than diesel, there is still a substantial difference between using gasoline or diesel and using water. There may be some power technicalities, and car aficionados who love racing would attest to that, but the reality is that it works. Surveys show that people would consider using water as fuel for their cars if it means saving buckets of money that goes to the cashier at the gas pump.

The concept of water being used as fuel is simple. You will be using Hydrogen gas or H2 gas instead of diesel fuel or gasoline. Right now, technology still doesn't permit us to utilize 100% Hydrogen gas on a car. It is usually mixed with a little bit of diesel, but still it reduces the money you'll have to pay for diesel fuel. When you use the hybrid of diesel and hydrogen gas in your car, your car runs efficiently and it will get you to where you need to go.

Next, crude oil enters the process of refining. This is the stage where crude oil is processed into the different forms of fuel it will become. Gasoline and diesel fuel primarily differ in the refining process that is used for it. Originally, better-refined gasoline was more expensive than diesel fuel; however, the costs of processing gasoline were overrun by the price impact of excess demand for diesel fuel. Diesel fuel and distillate heating oil, on the other hand, are processed using the same refining process. This is the reason why the increase in prices in one affects and increases the prices of the other.

Seasonality in the demand for diesel fuel and distillates ? The price of diesel fuel slowly rises during the fall, declines in the late winter, rises through the early spring, and then declines in the summer. The demand by farmers during the different seasons creates an upward pressure on the diesel prices.Transportation costs ? The distance between the retail location and distribution terminals and refineries has a direct relationship with the transportation cost?that is, an increase in one increases the other.Regional operating costs and local competition ? Depending on the location of the dealer, the cost of doing business varies which include wages and salaries, benefits, equipment, lease, insurance, overhead, and state and local fees. Even if retail stations are in close proximity to one another, they still have differing costs. Another factor that affects diesel fuel prices is the number and location of the local competitors.And will this fuel prices ever effect our car insurance estimates, if fuel goes up our insurances must come down. - 21392

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Hope you like this article about fuel prices Wayne also writes about car insurance estimates and student car insurance. Be advise not to miss your opportunity to read them as well!