# Why diesel costs more than gasoline > Diesel usually costs more than gasoline for four structural reasons: higher taxes, costlier refining to hit ultra-low sulfur, export demand and competition for the same middle-distillate barrel from heating oil and jet fuel. _Updated Jul 10, 2026._ Diesel usually costs more than gasoline at the pump, and it comes down to four structural reasons: taxes, refining, competition for the same barrel and exports. None of them is a seasonal fluke. They are built into how diesel is taxed, made and used, which is why the diesel premium tends to persist rather than come and go. ## Taxes Start with the part set in law. The federal excise tax on diesel is 24.4 cents a gallon, a 24.3-cent excise plus a tenth-of-a-cent leaking-tank fee, against 18.4 cents on gasoline. That is a 6-cent gap Congress set in 1993 and has not changed since. Most states also tax diesel at a higher rate than gasoline. Every cent of it rides inside the DOE number, before a drop of fuel is even refined. ## Refining Diesel is a middle distillate, and turning crude into on-highway ULSD takes deeper processing than making gasoline, because the sulfur has to come down to 15 parts per million. A barrel of crude also yields more gasoline than distillate when it is refined, so diesel draws on a smaller slice of each barrel. Tighter spec and thinner yield both push the cost up. [Chart: US on-highway diesel price](https://mondaydiesel.com/number/doe-diesel-price) ([data](https://mondaydiesel.com/number/doe-diesel-price.md) — chart image: https://mondaydiesel.com/charts/number/doe-diesel-price/chart.png) ## Competing demand for the same barrel Here is the one most drivers miss. Heating oil and diesel are practically the same fuel, per EIA, so every winter the furnaces of the Northeast compete with trucks and farms for the same middle-distillate barrel. Jet fuel and marine fuel pull from the same pool. When distillate demand runs hard, diesel can climb even in a stretch when gasoline is flat, because the barrel is being pulled in more directions than gasoline is. ## Exports The US ships a large volume of distillate abroad, which keeps a floor under the domestic diesel price even when US demand softens. Gasoline is far more of a domestic-only fuel, so it does not carry the same export pull. ## The shared floor underneath both It helps to remember what diesel and gasoline have in common. Both are refined from the same crude oil, and crude is the single biggest piece of either pump price. EIA puts crude at about 51 percent of the retail on-highway diesel price averaged from 2004 through 2025. So the two fuels rise and fall together on the crude that makes them, and the four reasons above are why diesel carries a premium on top of that shared base rather than why it moves day to day. When people ask why diesel is expensive, the honest answer is that crude sets the floor and taxes, refining, distillate demand and exports build the diesel premium on top. [Chart: US pump price vs Gulf Coast spot](https://mondaydiesel.com/margin/us-vs-gulf-coast) ([data](https://mondaydiesel.com/margin/us-vs-gulf-coast.md) — chart image: https://mondaydiesel.com/charts/margin/us-vs-gulf-coast/chart.png) ## Worked example: the wedge you can see The tax gap alone is 6 cents a gallon, diesel over gasoline, fixed and verifiable. On top of that, the retail-minus-spot gap on the live chart above, about $1.33 a gallon in early July 2026, is where all the taxes and the distribution cost sit between the wholesale hub and the pump. Diesel carries a heavier version of that wedge than gasoline does, and the refining and demand story stacks on top. Add it up and the pump premium follows. One honest caveat: the gap is not fixed and it can even flip. In spring and summer, when driving-season gasoline demand peaks and heating demand is gone, gasoline sometimes runs above diesel for a stretch before diesel pulls back ahead in winter. The premium is structural, not constant. Monday Diesel reports the diesel number and the retail layer that sits inside it. It explains why the premium exists and it does not forecast where the diesel-to-gasoline gap goes next. Monday Diesel is a free weekly read of the DOE diesel number and what it does per mile. Built entirely from EIA's public data, in your inbox before dispatch, one email a week. ## Related data + guides - [This week's DOE diesel price](https://mondaydiesel.com/number/doe-diesel-price) - [Retail, rack and spot: the diesel price ladder](https://mondaydiesel.com/guides/retail-rack-and-spot) - [Winter diesel: blends, gelling and the seasonal premium](https://mondaydiesel.com/guides/winter-diesel-blends-and-gelling) - [Glossary](https://mondaydiesel.com/glossary) ## Common questions ### Why is diesel more expensive than gas? Higher taxes, costlier refining to hit ultra-low sulfur, export demand and competition for the same middle-distillate barrel from heating oil and jet fuel. The federal tax alone is 6 cents a gallon higher on diesel. ### Is diesel always more expensive than gasoline? No. The gap moves with the seasons. Gasoline can run above diesel in spring and summer when driving demand peaks and heating demand is gone, then diesel usually pulls back ahead through winter. ### How much higher is the tax on diesel? The federal excise is 24.4 cents a gallon on diesel versus 18.4 on gasoline, a 6-cent difference set in 1993. Most states also tax diesel more heavily than gasoline. ### Are diesel and heating oil the same thing? Practically, yes. Both are middle distillates, per EIA, which is why winter heating demand in the Northeast can pull diesel prices up by competing for the same barrel. --- Canonical URL: https://mondaydiesel.com/guides/why-diesel-costs-more-than-gasoline