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Seventy percent of the nation's goods are transported in diesel-powered vehicles, helping to make it America's primary commercial fuel.

1. SUPPLY AND DEMAND: DIESEL  

Crude oil is the source of a number of important fuels, including gasoline, heating oil and diesel. Because these fuels all have the same starting point, refineries must decide what to produce when, based on a mix of supply and demand calculations.

WHAT INFLUENCES PRICES?

As with gasoline, the major components of diesel fuel prices are the cost of crude oil to refiners, federal and state taxes, and the cost to manufacture, distribute, and market the diesel fuel. Diesel prices generally reflect price trends for crude oil. Short-run factors that also affect prices include supply shortages resulting from refinery outages, transportation issues, adverse weather conditions, or pipeline problems.

Diesel prices mirror crude oil prices

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HOW DO TAXES AFFECT THE PRICE YOU PAY FOR DIESEL?

The Impact of Taxes on Diesel Prices 2008 - State & Federal Diesel Taxes

Diesel Fuel Taxes: Click on the U.S.A map above to see diesel fuel tax figures in greater detail.

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2. DIESEL FUEL IS GETTING CLEANER  
Sulfur occurs naturally in crude oil and sulfur removal is an increasingly important part of the diesel refining process. Over the past decade, American refineries have cut diesel's sulfur content dramatically, yielding significant reductions in vehicle emissions.

ULTRA LOW SULFUR DIESEL IS HERE!

New U.S. Environmental Protection Agency (EPA) standards require a major reduction in the sulfur content of diesel fuels and emission levels from diesel engines and vehicles. To meet the EPA standards, the petroleum industry is producing Ultra Low Sulfur Diesel (ULSD) fuel, a cleaner-burning diesel fuel containing a maximum of 15 parts-per-million (ppm) sulfur.

By June 1, 2006, at least 80 percent of the highway diesel produced or imported will be ULSD fuel, replacing most Low Sulfur Diesel (LSD) fuel, which contains a maximum of 500 ppm sulfur. Used in combination with cleaner-burning diesel engines and vehicles, ULSD fuel will help to improve air quality by significantly reducing emissions. By December 1, 2010, all highway diesel fuel offered for sale must be ULSD fuel. Between 2006 and 2010, both ULSD fuel and Low Sulfur Diesel fuel will be available. Some retail outlets will sell ULSD fuel, others Low Sulfur Diesel fuel, and some will sell both.

Look for these labels at the pump

labels'


ULSD fuel will burn cleaner in both existing diesel engines and in the new diesel engines and vehicles that will be equipped with advanced emissions control systems beginning with the 2007 model year. Because of this advanced technology, diesel-powered vehicles produced in the 2007 model year and later must use ULSD only.

ULSD requirements for non-road use (e.g., locomotives, boats and construction and farm vehicles) will be phased in on a slightly delayed timetable, except in California.

non-road diesel chart

Answers to Common Questions about ULSD Fuel

Q. Where can I purchase ULSD fuel?
A.
Although ULSD fuel will be the dominant highway diesel fuel produced, EPA does not require service stations and truck stops to sell ULSD fuel. Therefore, it is possible that ULSD fuel might not be available initially at every service station or truck stop and that a diesel retailer may choose to sell Low Sulfur Diesel fuel instead of ULSD fuel. The industries involved in the transition are doing all they can to minimize potential inconveniences during the conversion to the new diesel fuel.

Q.May I continue to purchase Low Sulfur Diesel fuel if I prefer to use it in my older vehicle?
A.
Owners of 2007 and later model year diesel-powered highway vehicles must refuel only with ULSD fuel. Owners of 2006 and earlier model year diesel-powered engines and vehicles may use ULSD or Low Sulfur Diesel fuel during the transition period. Only ULSD fuel will be available for highway use starting on December 1, 2010.

Q. How will I know which pump is dispensing ULSD fuel?
A.
Federal regulations require the labeling of all diesel fuel pumps to specify the type of fuel - ULSD fuel or Low Sulfur Diesel fuel - dispensed by each pump. Similar instrument panel and fuel inlet/fill cap labeling is being mandated for 2007 and later model year engines and vehicles that require ULSD fuel. Consumers are advised to check the pump labels and vehicle labels to ensure they are refueling with the proper diesel fuel consistent with their vehicle warranties.

Q. How will ULSD fuel affect air quality?
A.
ULSD fuel will enable the use of cleaner technology diesel engines and vehicles with advanced emissions control devices, resulting in significantly improved air quality. Annual emission reductions will be equivalent to removing the pollution from more than 90 percent of today's trucks and buses, when the current heavy-duty vehicle fleet has been completely replaced in 2030.

Q. May I continue to blend No. 1 diesel (kerosene) with my diesel fuel to improve cold weather performance?
A.
Only ultra low sulfur kerosene (No. 1 diesel with no more than 15 ppm sulfur) may be blended with ULSD fuel to improve cold weather performance. With so many kerosene formulations on the market, care must be taken to select kerosene with a maximum of 15 ppm sulfur. Blend rates will remain the same as with Low Sulfur Diesel fuel.

Q. Will ULSD fuel be more expensive than the current Low Sulfur Diesel fuel?
A.
ULSD fuel costs more to refine and distribute than Low Sulfur Diesel fuel. No one can predict with certainty the price of ULSD fuel at the pump. Many factors affect the consumer price of fuels, including the price of crude oil on the global market, geopolitical, weather, transportation and economic events, as well as supply and demand. Visit the Energy Information Administration web site for more information on fuel prices.

Q. How will ULSD fuel affect the power and fuel economy of existing diesel cars, trucks and non-road engines and equipment?
A.
Under typical operating conditions, there should be no noticeable impact on overall power using ULSD fuel. Fuel economy may be reduced slightly because the process that removes sulfur also can reduce the energy content of the fuel.

Q. Will ULSD fuel affect the performance of my vehicle?
A.
Engine and vehicle manufacturers expect ULSD fuel to be fully compatible with the existing fleet, including 2006 and earlier model year vehicles. In some instances, the introduction of ULSD fuel to older vehicles may affect fuel system components or loosen deposits in fuel tanks. As part of a good maintenance program, owners and operators of existing cars, trucks and buses are encouraged to monitor their diesel-powered vehicles closely for potential fuel system leaks or premature fuel filter plugging during the change-over to ULSD fuel.

Q. Can Low Sulfur Diesel fuel be burned without operational problems in 2007 model year and later cars and trucks?
A.
Diesel-powered engines for 2007 and later model year vehicles are designed to operate only with ULSD fuel. Improper fuel use will reduce the efficiency and durability of engines, permanently damage advanced emissions control systems, reduce fuel economy and possibly prevent the vehicles from running at all. Manufacturer warranties are likely to be voided by improper fuel use. Additionally, burning Low Sulfur Diesel fuel in 2007 and later model year diesel-powered cars, trucks and buses is illegal and punishable with civil penalties.

Q. Will I need to put an additive in my fuel tank to replace the lubricity that was provided by the higher sulfur content?
A. Like Low Sulfur Diesel fuel, ULSD fuel requires good lubricity and corrosion inhibitors to prevent unacceptable engine wear. As necessary, additives to increase lubricity and to inhibit corrosion will be added to ULSD fuel prior to its retail sale. With these additives, ULSD fuel is expected to perform as well as Low Sulfur Diesel fuel.

Q. What are the penalties for failing to comply with EPA's ULSD fuel standards?
A.
The new standards provide strong incentives for suppliers to provide the proper ULSD fuel formulation. Civil penalties of up to $32,500 per violation per day can be assessed for non-compliance with EPA's ULSD fuel standards, or for misrepresentation of the sulfur level of diesel fuel. For more information about ULSD fuel standards and implementation, visit:
Clean-Diesel Fuel Alliance Information Center

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Motor Fuels > Diesel

1. Supply and demand: diesel

What influences Prices?

How do taxes affect the price you pay for diesel?

2. Diesel fuel is getting cleaner

Progress in sulfur removal


Coming Soon: Ultra Low Sulfur Diesel

Heating Oil Natural Gas Gasoline Diesel