Why is diesel more expensive

Diesel is now dearer. Globally, diesel has been a more costly fuel due to the higher cost of production. However, in India, the price of diesel historically has been lower than petrol and this is largely attributable to the varied tax structure on the two fuels.

The excise duty and the VAT value added tax structure had been lower on diesel. However, in the past few months, there has been a sharp rise in duties. Hike in duty on diesel has been much more than that of petrol, thus making taxes on the two fuels almost equal.

Thus, with a higher base price of diesel, the price in the retail market is now getting ahead of the petrol prices. During the past few months, when crude prices were soft in the wake of the pandemic, the central government had announced hikes in the excise duty charged on petrol and diesel in order to shore up its coffers.

The excise duty on petrol had gone up from around Rs 20 per litre in February to Rs 33 per litre now. Similarly, the duty on diesel had gone up from Rs 16 per litre in February to Rs 32 per litre now. The tax on petrol was Rs 9. Video series featuring innovators. ET Financial Inclusion Summit. Malaria Mukt Bharat. Wealth Wise Series How they can help in wealth creation.

Honouring Exemplary Boards. Deep Dive Into Cryptocurrency. ET Markets Conclave — Cryptocurrency. Reshape Tomorrow Tomorrow is different. Let's reshape it today. The federal tax on diesel fuel is 6 cents more than gasoline per gallon The last tax increase came in the early 90s, when diesel fuel generally cost less than gasoline. ULSD is a clean-burning diesel fuel that was gradually phased into the market between and , replacing on-highway diesel fuel, known as Low Sulfur Diesel.

The environmental benefits of ULSD are huge but they bring extra costs. The daily refining costs for ULSD are also higher. All of this influences the cost of diesel fuel. Fuel oil used for heating homes is made from the same components as diesel fuel. How much carbon dioxide is produced from U. How many gallons of gasoline and diesel fuel are made from one barrel of oil?

How much biomass-based diesel fuel is produced, imported, exported, and consumed in the United States? Does EIA have forecasts or projections for energy production, consumption, and prices for individual states? Didn't find the answer to your question?