The average price of diesel fuel has fallen below the average price for regular gasoline for the first time in six years. They crossed graphs last week.

Farmers and truckers and other diesel users may be happy about the worldwide glut of diesel fuel. But those who drive gasoline-powered cars are wondering out loud why they don't seem to be getting the benefits of another crash in oil prices, now below $49 a barrel.

The average price of diesel fuel in Columbus on Friday was $2.61 a gallon, according to AAA, and the average price of regular gasoline was $2.75.

From August 2009 through June of this year, retail diesel fuel prices sold at an average premium of 34 cents per gallon over regular grade gasoline, with the premium reaching more than 90 cents per gallon.

"Essentially the price relationship has turned around recently due to a combination of low seasonal diesel fuel demand and very strong gasoline demand along with refinery outages in California," said Sean Hill, an analyst and forecasting expert for the federal government's Energy Information Administration. "Strong gasoline demand thus far in 2015 has kept gasoline prices relatively elevated despite falling crude prices, while diesel prices have primarily followed crude prices downward.

"Then the outages in California have led to tight gasoline supplies and significant gasoline price spikes (in Southern California especially), which have raised the national average price for gasoline over the last two weeks while the diesel price continued to steadily fall. U.S. refineries have been running at very high rates to capitalize on the profitable gasoline margins due to strong demand, all the while continuing to produce diesel despite stagnant demand, which has led to abundant supplies of diesel and relatively weak prices."

The typical seasonal demand pattern is strongest for diesel in the winter heating season and strongest for gasoline in summer. That has been amplified by especially strong demand for gasoline in the United States and abroad. Cheaper gas has made driving more popular.

Based on the latest data from the Federal Highway Administration, Americans drove a record 987.8 billion miles during the first four months of 2015, topping the previous record of 965.6 billion miles set in the first four months of 2007.

EIA says price parity between gasoline and diesel is likely to be a relatively short-term phenomenon, as gasoline demand moderates with the end of the summer driving season and diesel demand begins to grow in response to the fall agricultural harvest and the winter heating season.

Patrick DeHaan, of GasBuddy.com, isn't so sure: "Outside of a frigid winter, I don’t see why diesel would bounce back any time soon, though it will in the fall temporarily as farmers harvest crops," he said in an email.



Original article By Richard Piersol / Lincoln Journal Star
http://columbustelegram.com/

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