by Michael Sivak, Sivak Applied Research.
Although both diesel and gasoline are made from oil, the trends in their prices do not always go in parallel. One reason is that the demands for these two fuels do not necessarily follow each other. A case in point is the situation during the current Covid-19 pandemic. While personal driving (which uses primarily gasoline) is down greatly because of various stay-at-home mandates, commercial truck transport (which uses primarily diesel) has been substantially less affected.
This brief note analyzes the changes in the prices of diesel and gasoline during the first 17 weeks of 2020, and compares them with the changes during the first 17 weeks of 2019. The raw data (the average retail prices of No. 2 diesel and regular gasoline) came from the U.S. Energy Information Administration. The results are shown in the table below.
During the first 17 weeks of 2020, the price of diesel decreased by 20.9% (from $3.079 to $2.437). In contrast, during the same time period, the price of gasoline decreased by 31.2% (from $2.578 to $1.773).
In comparison, during the first 17 weeks of 2019, the price of diesel increased by 5.2% (from $3.013 to $3.169), while the price of gasoline increased by 29.1% (from $2.237 to $2.887). (It is typical to see an increase in the price of gasoline in warmer weather due to an increase in personal driving.) Thus, in comparison with the trends in 2019, the diesel prices during the first 17 weeks of 2020 decreased by 24.8% (0.791 is 75.2% of 1.052), while the gasoline prices decreased by 46.7% (0.688 is 53.3% of 1.291).
Michael Sivak is the managing director of Sivak Applied Research and the former director of Sustainable Worldwide Transportation at the University of Michigan.