Why is diesel so expensive compared to petrol? Prices explained | The Sun

DIESEL prices have soared well above those of petrol in recent months and refuse to come down, even as oil prices were reduced.

The latest figures from the RAC show diesel to be an average of 24p per litre pricier than petrol, even though it usually has a lower production cost.

Buying diesel from a UK petrol stations will set drivers back 189.27p per litre on average, with the price expected to rise in the coming weeks.

Changes in supply and demand, due to the war in Ukraine and the changing of the seasons, have sent the price of diesel spiralling out of control.

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Why is diesel so expensive?

According to motoring magazine Auto Express rising fuel prices are a result of the OPEC oil producing nations cutting production substantially.

A spokesperson for RAC fuel told them: "Since OPEC and its allies agreed to reduce oil supply substantially, we've seen the price of wholesale diesel go up by 9p a litre and petrol by 4p a litre.

"This has led to the average price of diesel going up by almost 4p a litre and petrol by nearly a penny.

"Sadly for diesel drivers, the situation seems certain to get worse with prices heading back to 190p a litre which will add £3 to the [average] cost of a tank."

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Will diesel prices drop?

In short, not for some time.

Diesel prices have actually already dropped, with the current average price 19p per litre lower than in July.

However, the factors that make diesel particularly expensive compared to petrol are still putting upward pressure on prices and are expected to do so for several months at least.

Things that affect the price at the pump include the global price of oil, which has gone up, and the pound-to-dollar exchange rate (as fuel is sold in dollars per metric tonne), which has weakened recently.

An RAC spokesperson told The Telegraph: "While some of these stay largely static – such as the fuel duty rate and VAT – others such as the oil price and dollar-to-sterling exchange rate can be very volatile.

"This explains why prices rise and fall. A combination of high oil prices and weak Sterling leads to the highest pump prices."

Why is diesel more expensive than petrol?

A cut to oil production should boost the price of all fuel, not just diesel.

However, petrol prices have been able to stay low because demand for petrol has fallen, particularly in the USA as Americans use their cars less in the autumn and winter.

Meanwhile, diesel is used for powering generators and heaters, as well as a replacement for gas amid a shortage caused by Putin's invasion of Ukraine.

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This means that, as the weather turns colder, demand for diesel has increased, sending the prices skyward.

Not only is Russia Europe's main source of gas, it's also a major oil exporter, meaning that as nations stop buying from the Putin regime, further pressure is put on fuel prices.


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