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December 29, 2008

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There's a bigger difference. Diesel fuel for on-road use is required to be extremely low in sulfur to cut down on pollution. Federal regulations have required less than 15 parts per million of sulfur since 2010. Heating oil has a much higher sulfur content--more in the range of 500 parts per million. Extra refining measures are required to produce ultra low sulfur diesel, and this, in part, accounts for its higher cost.

It's amazing how there are only 2 differences between heating oil and road deisel. 1 is the red dye. and 2 is a 60 cent per gallon road tax! And diesel is 2 steps below reg gas in the refining process. There is something rotten in Denmark!

Don't forget about the changing diesel specifications. On-road diesel has a much lower sulfur content than it used to, owing to more hydrotreating at the refinery level. So, as refiners have geared up to make the new ULSD for the on-road market, they are making far less of the regular diesel, or home heating oil. The newer ULSD, therefore has worked its way into the home heating market, as well as vehicle fuel market. Since it is mroe expensive to make, the price goes higher.

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