Views on commodities and energy
Diesel making gasoline look cheap
Drivers are feeling the pinch from record high gasoline prices in the United States, but they should be happy they’re not buying diesel.
The price of diesel has shot up nearly 50 percent since a year ago to $4.27 a gallon, touching off a rash of minor protests by U.S. long-haul truckers in recent weeks.
By comparison, gasoline prices have risen only about 21 percent since a year ago to a relatively modest price of $3.67 a gallon on average, according to the daily price survey from the AAA.
The price of both key fuels has been tracking the soaring cost of crude — which is up sixfold since 2002 because of increasing demand from China and other developing countries.
But why would diesel rise so much faster than gasoline?
One theory is that worsening electricity supply problems in countries like China, South Africa, Chile, Argentina, and parts of the Middle East has increased demand for middle distillates like diesel for use in temporary power generators.
Whatever the cause, the increase in world demand for diesel has boosted U.S. fuel exports to their highest since 1991 and helped push U.S. distillate supplies to 3 percent below a year ago, according to the most recent data from the U.S. Energy Information Administration.
U.S. gasoline supplies, meanwhile, are running at a surplus.