Drivers and Constraints for Diesel Fuel

Drivers

Energy Efficiency

  • Having a high energy density per unit volume, diesel is preferred in the markets, such as commercial heavy duty vehicles, power generation, and in various other industrial applications for its high energy/thermal efficiency.  

Heavy Transport Sector

  • Growing demand for heavy transport sector especially in the emerging economies like China, India, Brazil, and Indonesia drives the demand for diesel fuel

Taxation policies

  • Taxes imposed by most of the nations are less for diesel when compared to gasoline. Hence, diesel consumers enjoy a price advantage. However in the US, federal and local taxes on diesel are slightly higher than gasoline

Constraints

Environmental Policies

  • Stringent emission standards on diesel lowering sulfur emissions. By imposing “Clean Air Zones”, Governments around the world have put some restrictions to drive diesel vehicles

Alternative Fuel Vehicles

  • Increasing usage of alternative fuel vehicles, such as Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) vehicles could hamper the diesel fuel market. Countries like the US and China are creating dense network of natural gas refueling stations