In the United States, diesel fuel has consistently been more expensive than gasoline for nearly two decades. The main reason? Environmental regulations introduced in 2006 required refineries to remove sulfur from diesel to very low levels. Meeting this standard forced extra processing, increased energy use, and equipment upgrades, all of which raised production costs.

Taxes also play a role. Diesel faces a federal tax of 24.3 cents per gallon, compared to 18.3 cents for gasoline, with additional state-level fees in many areas. Policymakers justify the higher rate because heavy trucks and buses cause more wear on roads. Combined with high demand for trucking, farming, construction, and heating, these factors keep diesel prices elevated especially during winter when heating and freight needs spike. Supply disruptions, such as reductions in Russian diesel imports, have added further pressure.

Europe, however, approaches diesel pricing differently. Most countries there tax gasoline more heavily than diesel to encourage the use of the more energy-efficient fuel. On average, gasoline carries a tax of €0.548 per liter, while diesel is taxed around €0.445. This system keeps diesel cheaper at the pump despite Europe’s reliance on Brent crude, which is generally costlier than the U.S. benchmark.

Globally, diesel and gasoline prices vary widely. Many industrial and agricultural economies keep diesel below gasoline to support freight and farming. Seasonal heating demand can push diesel prices up, while oil-rich nations like Venezuela, Iran, and Libya sell both fuels at extremely low rates. Conversely, countries like Hong Kong and Norway have some of the highest pump prices in the world due to steep taxes and operational costs.

Ultimately, whether diesel is cheaper or more expensive than gasoline depends less on the fuel itself and more on local regulations, taxes, and economic priorities.