Cost difference between gas and diesel fuel! - Page 2 - Montana Owners Club

MacDR50 · 10-13-2007, 07:11 AM

When demand is relatively inflexible (fuel is a staple of life in our society) and supply is "managed" by a relatively few companies you get suppliers using maximum pricing strategies. In other words they choose the price x demand point that results in maximum overall industry income. The economics are pretty simple. The NA fuel market is dominated by as few as 5 companies who own almost all the refinery capacity. The number of independent refiners has dropped consistently over the last 20 years. The result is criminal profiteering or rather it would be if our lawmakers were willing to take on the gang of 5. Bio-diesel may help but just watch how fast the "Oilpatch" hoodlums with help from their friends in high places buy out and marginalize that growing segment in order to protect their little oligopoly.

Our prices in Newfoundland are regulated based upon the market price for crude oil. It doesn't help much. Our gas price is 107.7 and diesel 113.2 per litre. That's 4.06 and 4.29 a US Gal. The big differences are federal and provincial taxes. Going to do a little calculation to figure out how much I would have to drive to make up for the higher cost of diesel both initial and operating.

sreigle · 10-13-2007, 07:53 AM

My diesel gets 40% better mileage than did my 1999 F350 V10 gasser, so diesel cost per mile is still cheaper for me. However, the price difference eats into that difference.

What I don't understand is for many, many years in the midwest diesel was always a nickel or more cheaper than gasoline. Always. Even in the winter. My personal opinion is that reversed course about the time our government decided to allow the truckers to charge fuel surcharges based on their current fuel costs. No longer did all those truckers and their union scream loudly when diesel costs increased above the estimate in their cargo contracts, costing them money or, in some cases, causing a loss. Now that they can pass on the cost to the person at the delivery end they have no reason to complain. And they don't. And we little guys pay the price. This is, of course, my opinion as I am not an expert on this topic.

mobilrvn · 10-13-2007, 08:14 AM

There is no one left to confront the oil companies since they own the White House. This summer we saw the gasoline price increase to 30-40 cents more than diesel for the summer explotation season and then when we returned from Canada, prices for diesel have increased 30-40 cents a gallon more than gasoline. Used to be when diesel went up in price, the truckers would boycott the stations, congress would have an investigation and the oil companies would lower the price about half of what they raised it. With the fuel surcharge by the trucking companies, no one cares and us little guys take it in the shorts. If we had a stick and brick, would make my own diesel!

MacDR50 · 10-13-2007, 09:04 AM

OK My calculations are completed. Ignoring the slightly higher cost of diesel maintenance I would have to drive about 88,500 miles to make up the extra cost of a diesel engine. This assumes a 50% mileage advantage for diesels. There are other factors, of course, but that equates to perhaps 4 years of normal driving for me. Those other factors are well covered in this article.

http://www.trucktrend.com/features/t...diesel_vs_gas/

quarrles · 10-13-2007, 01:05 PM

It seems as if the "diesel" users are mostly truckers hauling freight. Unleaded users have a much more discretionary usage level and can cut back on unecessary mileage. Commercial haulers just "pass it on" so we all pay for it. Oil companies have no incentive to reduce costs whatsoever.

I got a hankering for a boat once. Picked out a beaut! Asked the salesman how many hours etc. per gallon. He said "If you have to know that you can't afford the boat". Nuff said there.

My diesel usage is all discretionary, fun but discretionary. Interesting what our congress has done about price gouging by the oil companys isn't it?

dchafer · 10-13-2007, 03:24 PM

Quote:

quote:Originally posted by Art

The difference between regular gasloine and diesel fuel her in New Jersey seems to be widening MORE than normal for the winter. Although NJ has some of the lower overall prices for fuel(gas at $2.43/gallon and diesel at $2.99 per gallon), is this normal AND is this the same across the US?

Hey Will, keep those diesel prices low.. we are in Port A on TUesday.
How is the fishing.....

quarrles · 10-14-2007, 02:14 AM

Eagle Man,

The Europeans built and sold their citizens on diesel fueled vehicles, so much so that the refineries there cannot keep pace with their demand for low sulfur fuel. We, US, now export to Europe creating the price foundation for excess cost here. I certainly did not blame the WH for any problem for diesel cost, that would be political and not of any use here. I do, however, blame the Legislative branch for total failure to help the American public in this sorry example of special interest influence in the congress.

I apologize if I was not clear on this issue, and would not, intentionally get political here. Good camping...Q

osofine · 10-14-2007, 05:34 AM

When we ordered our Diesel in fall 2004 we 'thought' diesel fuel was 'always' cheaper.:| Wrong! Our first fill up shocked us. But we do get better mileage running around town than the same gas truck. I'm not sure what to say I get towing. We took one short trip so far and I think.... it was 6.93 mpg ...ouch. I was using Ford's Tow-Haul mode. Not sure if I should have taken it off of tow-haul while highway driving. We have a Superchip computer that has a towing mode and we will try that this winter on our way to Texas. Around northern Illinois the cost of Diesel is crazy. But since I have worked in the Petro-Chemical field for years I know why. 1. They add an additive for winter starting here in the north. 2. The newer diesels (2007) require a cleaner diesel that takes more refining. My truck would run on plain old semi-truck diesel, but it's not available anymore. Except maybe at truck stops.
Diesel prices here are $3.19 - $3.49 right now. Gas is $2.69 - $3.09.
Regardless of the price - I love my truck

sreigle · 10-17-2007, 10:38 AM

Mac, you have to, of course, figure the factors as they pertain to you and make your decisions accordingly. But, to me, who does a lot of towing every year as well as a lot of solo driving of this truck, mileage was a bonus. The ability to tow us where we want to go and to last a long time were the main factors. Of course, if diesel mileage were half that of a gasser, then the mpg factor would have been weighted more heavily. For me.

Keep in mind, also, that if you ever trade that diesel, you will get most, perhaps all, of that price premium back, assuming the truck is in good shape. I've traded in two diesels and can attest to that.

mail2us · 10-17-2007, 04:09 PM

Not to wander to far from topic, my reading lately indicates at least Ford and GM will be going "more" diesel on their 2009 1/2 ton trucks coming out in late 2008; that GM just bought 50% share of Pensky's Italian diesel engine manufacturer; and that more American built vehicles are going diesel in next few year beyond trucks.

Why? With diesel pump prices passing regular gas I wonder what large vehicle manufacturers and oil companies know that I don't.

Can anyone explain the movement toward more diesel product? Tks.

skypilot · 10-18-2007, 05:16 AM

Move is because of higher efficiency of the diesel engine. Many looking at (or have in limited distribution -- testing them I guess) Diesel - electric hybrids overseas and have seen a few around her in use by the university for testing.

Jerzy54 · 10-18-2007, 06:38 AM

Europeans have lots of diesels cars, but diesel fuel there is still cheaper then gas. With crude oil hitting a new records every day I think next year we will be paying over $4 per gallon.

dscott · 10-19-2007, 03:41 AM

My new truck gets about 45% more mileage than my old gasser,more power,higher efficiency.The cost difference up here is about 30 cents a gallon. Next year GM 1/2 tons will have a small diesel V8 available.They plan on dropping the 6.0 gasser.

Ozzie · 10-19-2007, 03:49 AM

I had this in another thread - more appropriate in this one...

I understand diesel is in much more demand, but why have the diesel prices climbed higher than gas? Diesel was usually lower from my recollection.
It seems diesel is slower to rise in price, but then stays there long after gas comes down. Not as much fluctuation, but it still seems like they are raking us over the coals.
I was under the impression that it cost less to produce diesel fuel, so this spread makes little sense to me.

05WAF350 · 10-19-2007, 04:50 AM

Yes, I also thought the cost was less because it does not require all the refinery. The cost here jumped this week from $2.99 to $3.60 to $3.80 a gallon in Port Orchard , Washington.

skypilot · 10-19-2007, 05:00 AM

Talking with the local BP dealer / distributor -- he emphatically says it is supply and demand.(I was chiding him asking where his Lexus convertable was hiding!

) Due to most of our consumables being transported by truck (or train for that matter), the use of diesel by OTR truckers and trains remains constant vs. the everyday automobile driver who can 'bunch trips, forego a trip, etc..' -- thus, for gasoline, the potential exists for excess to develop. Excess supply leads to drop in price with the hope that drivers will start driving again, etc. etc. etc -- vicious circle in that market. For diesel, since the demand is fairly constant (slightly rising as our markets grow each year); the supply drives the price. Since a barrel of crude is now over $88 per barrel, that translates to higher prices. His literature is saying that if the spot market reaches $100 per barrel, diesel will be $4.00 per gallon, gasoline will be $3.50 to $3.75 per gallon nationwide averages. Finally, as we have read in other posts, he also stated that there is no longer any incentive for the truckers to push for lower prices -- they can pass the cost per gallon right onto the customer. Therefore, that big lobby is no longer available to us to moderate prices (or price increases).

Finally, diesel here just went up 23 cents per gallon yesterday at two stations, 15 cents at the third. $3.49.9 per gallon now. Gasoline is 2.69 to 2.75 per gallon.

Ozzie · 10-19-2007, 05:51 AM

Even I could understand that reply skypilot...so basically we no longer have the support of a lobby like we used to because of the change in the truckers situation.
Is there anything that can be done? I view this as outrageous as now they appear to be free to stick it to everyone with no recourse.

Montana Sky · 10-19-2007, 06:40 AM

The price of diesel rises every winter as many parts of the country still use oil to heat their homes. Also, don't forget the millions and millions of dollars the EPA forced the oil companies to spend on updating their refineries to produce the new ULSD diesel fuel. Supply and demand also has some to do with it, but demand of diesel has remained pretty consistent over the past 8 months according the a report on CNN yesterday.

As for Washington: well we can thank our governor for her .39 cent per gallon diesel tax she put in place last fall. Washington has the highest price per gallon on diesel fuel across the nation. Check out www.flyingj.com or www.petrotruckstops.com for a nationwide current price on diesel.

Jerzy54 · 10-19-2007, 11:55 AM

I have one question to all of you.
What is the price of fuel you are willing to pay before selling
Monty and fuel thirsty trucks of course if we can find any buyers?

mobilrvn · 10-19-2007, 04:33 PM

In Opelika AL diesel prices increased twice this week! I remember in the spring that the talking heads said that oil would reach $100 a barrel. Looks like it is right on schedule. Diesel will increase at least 20 cents more a gallon by then! Hopefully the price increases will help the biodiesel producers to multiply.

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