Price Gap Between Diesel and Gasoline Widens in Global Markets
Due to surging demand, refinery bottlenecks, and supply issues in global markets, diesel prices are rising much faster than gasoline prices.
In global markets, diesel prices are rising much faster than gasoline prices due to increasing demand, refinery bottlenecks, and supply issues in Russia and the Middle East, widening the price gap between the two. Recent data reveals a distinct divergence in the growth rate and pump prices of diesel versus gasoline.
Rapid Growth in Global Markets
Diesel, long remaining in the shadow of gasoline in the fuel market, is taking the lead in the global price race. A price index covering 175 countries worldwide shows that the global average diesel price has risen about 5 points faster than gasoline over the past three months.
Annual Change Rates
As of the end of August, the average global price per liter of diesel rose to $1.59. Over the past 12 months, gasoline prices increased by an average of 19.38%, while the increase in diesel reached 32.86%, widening the price gap between diesel and gasoline.
Economic Structure and Demand Elasticity
While gasoline is predominantly used in passenger vehicles, diesel powers the production and logistics veins of the economy—from trucks to ships, trains to tractors, and heavy machinery. Consequently, diesel demand does not easily drop even when prices rise.
Refinery Capacity Bottlenecks
The most significant feature of recent price movements is the divergence between crude oil prices and refined product prices. The market is facing a crunch not so much in crude oil itself, but in the refinery capacity required to turn it into usable fuel.
Geopolitical Risks and Inventories
Ukrainian attacks on refineries in Russia, the war involving Iran, and supply and transportation issues in the Middle East have further squeezed the diesel market, while U.S. inventories have dropped to critical levels.
Outlook in Turkey and Europe
Turkey is also among the countries where this global divergence is prominently observed. As of August 31, Turkey's three-month price increase for gasoline was 14.3%, while the increase for diesel climbed to 21%, and a similar divergence has drawn attention in major European economies.