Diesel cheaper than gasoline for the first time since 2001

A flood of imported diesel pushed its price below that of gasoline for the first time since 2001, making cheaper for UK motorists to fill their tanks with diesel and reducing the cost for goods suppliers in a time when society is moving towards the diesel market.

1 out of 2 British cars are now diesel, compared to just 1 out of 10 in 2000.

Gasoline cost £1.132 a litre in the UK on 24 August, while the price of diesel at the pump was £1.110 , according to the latest data from the European Commission.

Higher imports from Russia, the US, India and Middle East helped to drive diesel to its lowest level in 14 years.

In addition, stronger demand for gasoline worldwide led refineries to increase production in recent months, creating a surplus of diesel as a byproduct.

While most of the EU countries enjoy lower taxes on diesel, the UK applies the same tax on it as on gasoline, which had made this product traditionally more expensive, according to Paul Whatters, a spokesman for the Automobile Association (AA).

“We’ve been calling it ‘the big diesel rip-off’ as we think the price on forecourts has been a little inflated.”

We think it is now priced more appropriately

“We think it is now priced more appropriately.”

The UK imports about 40% of the 28bn litres of diesel it consumes annually, as its refineries are moving towards the gasoline industry.

However, analyst said the current situation might not last long.

Olivier Jakob, the Zug, Switzerland-based managing director of Petromatrix explained to Bloomberg that it was the US market who determined the price of gasoline.

“The supply/demand balance in the US has been very tight and that has pulled up prices in Europe, including in the UK”. Prices will probably “even out again” when the U.S. gasoline demand switches to the type that’s suitable for winter, Jakob said.

You may also enjoy reading:

US surpasses Saudi Arabia as world's biggest oil and gas producer