Diesel price drops again, but still more than gas

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For the third week in a row, the national average retail price of a gallon of diesel dropped 3 cents for the week ending May 23, to $2.156.

Diesel continues, however, to be more expensive than gasoline, a situation that normally corrects itself when warm weather arrives.

The average price was down in every region tracked by the U.S. Department of Energy, the biggest drop being 6 cents in the Rockies.

On average, diesel was most expensive on the West Coast at $2.339 a gallon, though New England was nearly as expensive at $2.338. On average, it was least expensive in the Midwest at $2.097.

Historically, diesel is less expensive than gasoline in summer but more expensive in winter, because diesel supplies are affected by the demand for heating oil.

This summer, however, the price of diesel seems to be staying put, relative to the price of gasoline. Diesel has been more expensive for 38 weeks in a row, the longest stretch since 1996-97. Moreover, while a price difference of 2 cents to 8 cents a gallon is considered normal, the spread averaged 11 cents this winter and peaked Christmas week at nearly 20 cents.

Federal oil analysts believe the culprit is China, which is dramatically increasing its demand for diesel. U.S. distillate stocks, from which both heating oil and diesel fuel are made, were exceptionally low this past winter, and the oil industry fears more of the same this coming winter — which means the usual summer price surge of gasoline over diesel may not happen this year at all.

“The global balance for distillate fuel has tightened seemingly much more so than that of gasoline,” the DOE reported.

For state-by-state diesel prices, updated daily, visit http://www.etrucker.com/apps/promiles/fuelprices.asp.