A sign at Hill Brothers Jiffy Mart, 1904 Mount Vernion Rd. SE in Cedar Rapids, shows a higher price for diesel fuel than gasoline on Tuesday, Nov. 22, 2011. Diesel prices are higher due to increased demand, higher federal taxes and costs associated with processing to meet low sulfur standards. (George C. Ford/SourceMedia Group News)

As Eastern Iowans head out for Thanksgiving holiday travel, they will find the price of diesel fuel much higher than gasoline.

Price gauging at the pump by the oil companies and retailers? Not really.

While there was a time not that many years ago when diesel was cheaper than gasoline at the pump, a combination of worldwide demand, higher federal taxes and the cost of refining low-sulfur fuel have boosted the price of diesel in recent years, according to the U.S. Energy Information Administration.

Until recent years, the normal pattern had been for regular gasoline to cost more than diesel during the summer months, when families use their cars for vacation travel, and for diesel to cost more during the winter months, when demand for home heating oil increases. Diesel and home heating oil are similar fuels, and the price of heating oil sets a base price for diesel, which can be substituted if it costs less.

Since September 2004, according to statistics from the Energy Information Administration, there have been very few weeks when the price of diesel was lower than gasoline.

Typically the price has been much higher, with the difference or spread between diesel and regular gasoline spiking to a record 22.4 percent during the week that ended March 24, 2008. That’s in sharp contrast to the week of June 19, 2000, when diesel sold for a record 15.3 percent less than gasoline.

The Energy Information Administration says demand for diesel fuel has increased dramatically in recent years, not just in the United States but also in  China, Europe and India. Diesel-fueled cars and trucks accounted for 53.3 percent of all new European Union registrations in 2007, the most recent year for which data is available, up sharply from 13.8 percent in 1990.

Diesel fuel consumption in China has been soaring since the early 1990s, climbing from 25 million tons annually in 1990 to near 60 million tons in 2005, according to the most recent data available. In India, diesel fuel cars and trucks account for more than 50 percent of the vehicles sold each year, according to the Society of Indian Automobile Manufacturers.

While diesel demand has grown, a slower economy and higher prices have reduced the demand for gasoline in the U.S. and overseas. If consumption had continued unabated from the pace of the early years of the decade, Energy Information Administration analysts contend that gasoline prices would be higher and the spread between the two fuels would be much smaller.

New federal environmental regulations also are a key factor in the higher price of diesel fuel.

The U.S. Environmental Protection Agency in 2006 began requiring that sulfur content of diesel fuel be reduced dramatically from a maximum of 500 parts per million to no more than 15 parts per million for all diesel sold for road use after Dec. 1, 2010. The added processing to lower the sulfur content increases refining costs, which ultimately are passed on to motorists in the form of higher diesel prices at the pump.

The Energy Information Administration in 2001 estimated the higher processing costs would raise the price of diesel fuel by as much as 10.7 cents per gallon by this year. The same report warned that prices could go even higher if there were bottlenecks at the refineries.

The final factor making diesel fuel more costly than gasoline is the federal fuel tax. Gasoline is taxed at 18.4 cents per gallon, and diesel at 24.4 cents per gallon, rates that have remained constant for many years.

As the debate rages at the state and federal levels over how to pay for much needed road and infrastructure improvements, the road use tax on diesel and gasoline may ultimately be raised by Congress or state lawmakers.

In Iowa, Gov. Terry Branstad earlier this month said he is willing to delay consideration of a state gas tax increase for at least a year in favor of finding efficiencies and savings within the transportation system. Branstad was responding to a resident advisory panel’s recommendations, which included raising the gas tax by 8 to 10 cents a gallon and increasing the new vehicle registration fee from 5 percent to 6 percent.

Without raising more money to fund transportation expenses, the Iowa Transportation Commission is forecasting that revenues will fall short of meeting needs by $1.6 billion per year.