
This post comes to you from Popular Mechanics. Written By Larry Webster.
In the U.S., gasoline and diesel are dirt cheap compared to their cost in Europe. In late August, the average U.S. price for a gallon of gas was $2.60, and a gallon of diesel cost $2.65. Both diesel and gasoline come from the same barrel of oil—since diesel is a heavier, less refined product, it has historically cost less than gasoline. However, the relative price difference in the U.S. is determined by market forces, refinery constraints and taxes. Typically, demand for gasoline is higher, and U.S. fuel taxes favor gasoline, making gas less expensive here. Federally, we tax diesel at a higher rate than we do gas—24.4 cents per gallon of diesel versus 18.4 for gas. Some states tax gas a higher rate, but on average, the diesel tax is higher (With state taxes added in, the average diesel tax is 51.4 cents per gallon, gas is 47.0). According to the Energy Information Administration, since 2004, diesel has generally cost more than gasoline in the U.S., year-round.
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