Prices sourced from EIA Weekly On-Highway Diesel Survey. Updated weekly. For informational purposes only - confirm at the pump before fueling. Full disclaimer
DIESELCOST

Why Is Diesel More Expensive Than Gasoline? The Real Reasons (April 2026)

Current Spread - April 29, 2026

Diesel
$5.59
+$1.51/gal
spread
Gasoline
$4.08

Source: EIA Weekly On-Highway Diesel Survey + EIA Weekly Gasoline Survey, April 29, 2026. Both prices are US national averages.

Diesel runs $1.51/gal above regular gasoline right now - more than double the historical average of $0.20-$0.50. This spread is driven by five compounding factors, each of which is real, measurable, and explained below with the specific dollar amounts from current EIA and market data.

01

ULSD Refining Is Harder and More Expensive

Ultra-Low Sulfur Diesel (ULSD) - required by EPA since 2006 - has a maximum sulfur content of 15 parts per million (down from 500 ppm in highway diesel and 2,000 ppm in off-road diesel before the mandate). Achieving this requires deep hydrotreating: forcing hydrogen through the distillate fraction at high temperature and pressure to break sulfur-carbon bonds. Hydrotreating uses expensive catalysts, consumes hydrogen (which itself requires natural gas to produce), and reduces yield slightly. EIA estimates ULSD refining costs $0.15-$0.25/gal more than producing conventional low-sulfur diesel.

Source: EIA, Diesel Fuel Explainer Series

02

Heating Oil and Diesel Are Chemically the Same

Residential and commercial heating oil (#2 fuel oil) is chemically identical to diesel fuel - both are middle distillates refined from the same crude oil fraction. When heating demand rises (cold winter, slow spring warmth), heating oil demand pulls on the same supply pool as truck diesel. This is why diesel prices historically spike every October-November and ease every April-May. In spring 2026, European heating demand ran longer than seasonal models projected: the distillate inventory draw extended through mid-April instead of ending in March, keeping global distillate inventories $15-20 million barrels below the 5-year average.

Source: EIA Short-Term Energy Outlook, April 2026

03

Diesel Taxes Are Higher Than Gasoline Taxes

Federal diesel tax: 24.4 cents per gallon. Federal gasoline tax: 18.4 cents per gallon. Differential: 6 cents/gal, built into every gallon of diesel in every state since 1993. At the state level, the diesel-gasoline tax differential varies significantly. Pennsylvania taxes diesel 74 cents/gal vs 58 cents/gal for gasoline (16-cent differential). Illinois: 68c vs 39c diesel vs gas (29-cent differential). California's effective diesel tax burden (including cap-and-trade) exceeds gasoline by 30-40 cents/gal. The federal + state tax premium averages $0.12-$0.18/gal nationwide.

Source: Federation of Tax Administrators, April 2026

04

Freight Demand Is Global and Inelastic

Gasoline demand is consumer-driven: when prices spike, people drive less (elastic demand). Diesel demand is freight-driven: trucks have to run regardless of fuel price because they carry goods the economy needs. This inelasticity means diesel demand doesn't fall much when prices rise, giving refiners and traders pricing power. Post-COVID global trade reshuffles (manufacturing nearshoring, USMCA supply-chain changes, expanded Panama Canal traffic) have kept freight ton-miles at record levels in 2025-2026. A distillate-intensive freight market with inelastic demand keeps diesel prices elevated longer than a demand shock would in consumer fuels.

Source: OOIDA, ATA Trucking Activity Report 2026

05

Elevated Distillate Crack Spreads

The NY Harbor distillate crack spread - the refining margin for turning crude oil into diesel/heating oil - averaged $1.42/gal in March 2026. The 5-year (2021-2025) average is $0.68/gal. The current spread is more than double the structural baseline. When crack spreads are elevated, refiners maximize distillate output, but crude oil yield constraints mean they can't shift all production to diesel without reducing gasoline and jet fuel output. The crack spread reflects the market's pricing of tight diesel supply relative to demand - and until distillate inventories return to 5-year averages, the spread will remain elevated.

Source: NYMEX distillate futures, EIA Weekly Petroleum Report, March 2026

Historical Context: It Wasn't Always This Way

Until approximately 2005, diesel was cheaper than gasoline in the US. Diesel averaged 10-20 cents/gal below gasoline through most of the 1990s and early 2000s. The structural shift happened in two phases:

  • 2004-2006: ULSD mandate phase-in. The EPA announced the 15 ppm ULSD requirement in 2001, with compliance phased in from 2004-2010. Refineries began the expensive ULSD capital investment, and the cost started appearing in diesel prices.
  • 2005-2008: Commodity supercycle. Rapid Chinese industrialization drove global freight demand and crude oil prices simultaneously. Diesel demand outpaced refinery capacity globally, pushing the crack spread structurally higher.
  • 2010-present: Structural inversion. The diesel-gas spread has been consistently positive - diesel more expensive than gas - with only brief exceptions during COVID-driven freight demand collapse (spring 2020). The ULSD structural cost plus elevated global freight demand has permanently re-priced diesel above gasoline.

FAQ: Diesel vs Gas Price

When did diesel become more expensive than gasoline? +
Diesel was historically cheaper than gasoline through most of the 20th century. The 2006 federal mandate requiring Ultra-Low Sulfur Diesel (ULSD, 15 ppm sulfur cap) was the structural turning point - ULSD requires more complex refining that reduced yield and raised per-gallon cost by $0.15-$0.25. Before 2006, diesel averaged $0.10-$0.20 cheaper than gasoline. Post-2006, diesel has averaged $0.20-$0.80 more expensive than gasoline, with cyclical spikes (2012, 2022, 2026) reaching $1.50+ above gasoline during tight distillate periods.
What is the distillate crack spread? +
The distillate crack spread is the per-barrel profit margin refiners earn from converting crude oil into diesel fuel (or heating oil - they're the same product). It's calculated as the difference between the price of distillate (diesel/heating oil) and the crude oil feedstock price. The NY Harbor distillate crack spread averaged $1.42/gal in March 2026, versus a 5-year average of $0.68/gal. An elevated crack spread means refiners are earning more per gallon - but it also reflects tight distillate supply relative to demand, which is the underlying driver of high diesel prices.
Why are diesel taxes higher than gasoline taxes? +
Federal law taxes diesel at 24.4 cents/gal vs 18.4 cents/gal for gasoline, a difference of 6 cents/gal. The rationale: diesel is predominantly used in commercial trucks that cause disproportionate road wear. A fully loaded Class 8 truck causes roughly 10,000 times more road damage per mile than a passenger car. The higher diesel tax is intended to more equitably capture the road-maintenance cost from the heaviest users. Many states follow a similar logic and tax diesel at higher rates than gasoline, though the magnitude varies widely.
Will diesel prices fall below gasoline prices again? +
Not under current fuel standards. The ULSD mandate has made diesel structurally more expensive to produce than gasoline, and no rollback of those standards is likely. That said, the current spring 2026 spread ($1.51/gal above gas) is above the structural baseline of $0.20-$0.50. EIA's April 2026 Short-Term Energy Outlook projects the diesel-gas spread will narrow to $0.50-$0.70 by 2027 as global refinery capacity grows and distillate inventories normalize.

Sources: EIA Weekly On-Highway Diesel Survey, EIA Weekly Gasoline Survey, EIA Short-Term Energy Outlook April 2026, NYMEX NY Harbor distillate crack spread, Federation of Tax Administrators, EPA ULSD standards documentation. Updated April 29, 2026.

- Current US Average Diesel- Prices by State- Diesel Price History- Trip Calculator- Propane Cost Per Gallon