Diesel Prices Soar Despite Low Oil Costs
Patrick De Haan, head of petroleum analysis at GasBuddy, is seeing asked a lot about why diesel prices are so high right now.
Diesel averages $6.45 nationally and closer to $7.75 in Michigan, but oil prices are around $90 per barrel, a far cry from the record $147 seen in 2008 when gas was still under $5.
De Haan explained that it's not the price of oil itself causing the issue, but rather how hard it is to turn oil into diesel and how many people are fighting over getting it.
'A barrel of oil holds 42 gallons,' De Haan wrote. 'At $95 a barrel, the crude oil in each gallon costs about $2.26. Diesel at $6.50/gal means more than $4 of every gallon has nothing to do with the price of oil.'
He attributed this discrepancy to taxes, which account for around 60 cents of the cost per gallon, as well as a global shortage of diesel specifically.