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Max Heine

Diesel: Cheaper than gasoline?

| April 13, 2009

If you’re still smarting over last year’s outrageous diesel prices, you can take a little comfort in a prediction from the U.S. Department of Energy. The feds forecast diesel will average $2.19 over 2009, and $2.51 in 2010.

“The expected continuing decline in diesel fuel consumption in the United States this year as well as the growing weakness in distillate fuel usage outside the United States are projected to result in a narrowing of refining margins for distillate throughout the forecast period,” says DOE’s Energy Information Administration. “Because of the global weakness in industrial output, it is possible that we will see diesel prices fall below gasoline prices this summer.”

That forecast, as well as the rest of agency’s analysis, for the most part links the price of diesel and other fuels to the timing of an economic rebound. So watch the news, which you’ve probably noted of late has had reports of indicators showing that the downturn perhaps has hit bottom.

And particularly watch the stock market. If it rises faster than expected, don’t be surprised if the DOE forecast goes up in ultra-low-NOx smoke.

— Max Heine

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