Diesel vs. Gasoline Price Discussion

[BlackTieTD]

diesel fuel can be a substitute for heating oil. during the cold months, demand for heating oil (and in turn diesel) goes up. this is why we are paying more per gallon for diesel than gasoline right now. at least i hope that is why.

this would mean that come spring, the diesel prices should begin to drop off again so that gasoline will cost more per gallon than diesel.

is this a certainty? any reason why diesel costs more than gasoline that i have not mentioned? do we expect diesel to stay more expensive per litre than gasoline?

discuss  

(i am considering a gas to diesel engine swap and these factors weigh heavily on that decision)

[Master ACiD]

for the last 10 years i have been watching the gasoline and diesel prices here in palm beach, diesel has awalys been slightly higher cost compared to gasoline. this is probably because we dont have a "winter" here. no one has diesel fired heaters so the gas to diesel price ratio remains the same throughout the year.

however, during the "winter"  months, and in praticular the begenning of january when we have cooler weather and no one is using air conditioning, the price of gasoline and diesel drops. i wonder if this is because of the lower ammount of electricity used? usually by around 80 cents a gallon. diesel drops even more. it is only during the winter here that diesel drops below the price of gasoline.  keep in mind that "winter" for us does not even include freezing tempatures.

so a thrifty fuel consumer would be wise to stock up on fuel during the first days of january and burn this fuel throughout the summer months. personally, i buy about 200 gallons of fuel in the bengenning of january and burn that up all throughout the summer.  that saves me about $200 a year.
also, having a surplus of fuel is beneficial because we have a hurricane season down here, and during the last few hurricanes there were 12 hour + lines of people waiting to buy fuel.

[BlackTieTD]

the reason i am so concerned about this actually is for a cross-country vehicle. even if i was clever enough to make my own biodiesel, it would be impractical to haul drums of it along with me cross-country... eventually i would have to fill at the pumps regardless.

[mortskeg]

What I have heard (haven't verified) is that while diesel is much cheaper to manufacture/refine than gasoline, the reason that diesel prices have passed up gasoline in the last decade is that our government (here in the states) assesses a higher tax on the diesel because the 18 wheelers that burn it 'cause the most damage to the roads'.

Parts of europe on the other hand, pay the most for petrol, diesel second, and the cheapest for them is B100.  Other way around here.

That's what I've heard anyway, someone else might back me up or let me know where I'm wrong.

[BlackTieTD]

an ok article from MSNBC (if you trust MSNBC  :? ):

Why are diesel, gasoline going opposite ways?

looks like the article is from 18:55, 14/11/05

diesel price trends over the past 2 yrs:

[3beejay3]

There are a lot of factors affecting the price of gas/diesel as everyone is aware of and a lot of them are covered so far in this thread. Some of the price differences follow long term trends.
15-20 years ago diesel was 49-50c/l and stayed there for a long time(years) whereas gas during that period fluctuated between 37- 49c/l so gas almost always cheaper.
When I bought my Jetta in the fall of 2000, diesel was selling at the 56- 65c/l range and gas was in the 65- 75c/l range. Diesel has only become more expensive than gas this fall, staying around the low to mid 90's c/l while gas has fallen as low as 75 c/l in some places briefly.
However, when I bought my car, although I appreciated that diesel was a bit cheaper than gas, it had nothing to do with my purchase decision. I wanted a car that was going to be reasonably cheap to drive and that would last a long time. At that time I knew of several people that had put over 500,000km on their VW diesels so they seemed like a good bet.

I gave up worrying about the price difference along time ago and here's why.-
The average VW diesel gets roughly 10- 20% better MPG than a comparable gas vehicle so diesel can stay a bit more expensive up to a point before it becomes a negative tradeoff fuel pricewise.
If diesel stays more expensive than gas it discourages the 'fairweather' diesel vehicle purchaser so there is less competition for me to buy the car that I want, when I want it. I'm glad I wasn't in the market for a diesel car in the last year - too many gas idiots buying TDI's &TD's at inflated prices. I drive my cars into the ground so 'resale value' on my own cars doesn't concern me.
A diesel engine has other easily implemented fuel alternatives such as WVO,SVO, Biodiesel, etc. I could theoretically grow my own fuel.
Biodiesel is slowly entering the marketplace in Canada and it will do a good job of keeping Dinodiesel prices in check.

Besides, I just have grown to love driving diesels - 'It's all about the Torque, Man'!!!

BJ

[Red Rabbit]

A very interesting thread!!!

[3beejay3]

You have to remember you are talking about 2 completely different markets. You are from the US which has a greatly advanced Biodiesel market compared to Canada. There are currently only a handful(probably less than 6) of small scale commercial suppliers(for the retail market) across the entire country. In Ontario there are currently only one or two that I'm aware of and they only have B20.
There is a smattering of backyard producers here and there - maybe 1 or 2 hundred in all of Ontario(pop 12million people)
That is slowly changing.

If you didn't have a commercially availible Biodiesel on the West Coast of the US You would have Seen the price of Dino Diesel go even higher than it did after Katrina. Guaranteed. All those people that were filling up with BD would haver had to use DD putting even futher strain on already short supplies of DD, driving the price much higher than it was. It's economics 101.
So The BD actually helped keep your price of DD in check even though it didn't appear that way.

BJ

[VWRacer]

Fair play? That's why it's called "politics"...  

[BlackTieTD]

i agree with you entirely. until we have to pay what the europeans pay, i'm not at all worried about it. however, when making a decision such as the one i have before me, trying to understand trends in diesel vs. gasoline pricing and attempting to loosely predict what may happen only makes the decision-making easier.

very interesting conversation around biodiesel. what company are you affiliated with?

one of the two biodiesel fill stations here in toronto recently went out of business  :cry:

[3beejay3]

If you've got roughly 1,000,000 gallons availible in the PNW then that's probably about 2 or 3 times whats availible all across Canada.
Trust me when I say the BD market in the US is quite a bit ahead of what it currently is in Canada. It may be small in the US, it's microscopic here.

That is slowly changing.  Once we are at a point where say 10 -20% of all diesel consumed is BD(that's still a few years away yet ) then it will definitely keep DD prices in check. Especially if BD use is increasing every year

[BlackTieTD]

regarding your motives...anything that's going to make the world a cleaner and healthier... perhaps even safer place in the future is a noble endevour. doesn't sound like you're making bundles of loot either so big thumbs up to you.

[zyewdall]

For a brief time here this summer, biodiesel was actually cheaper than dino-diesel.  $3.15 vs $3.40.   I used to think that biodiesel would never be cheaper, because if it ever was, everyone would just switch, and exhaust the supply of biodiesel.  But there are alot of people who don't want to ruin their engine with biodiesel, even if it is cheaper.  :?

Interesting, because I just took a 1,200 mile trip down to AZ this week, and had to use dinodiesel.  Runs terrible in my truck compared to the biodiesel I'm used too....  knocking at idle, lots of foul smelling blue smoke on startup, and black smoke under acceleration.  I can't wait to get some biodiesel in there so it'll run better again.

I was actually wishing I had my SVO setup in place already. One of our cargo items was about 300 gallons of canola oil and 250 gallons of olive oil.  I wouldn't have minded taking a little of that.

[Justin]

for a large plant to produce biodiesel it costs them like 2.40 out the door (this is on the high side), then the plants are selling for a dollar more a gallon than what conventional diesel goes for. they do this be cause the distributor gets that dollar back in tax incentives when he blends it into blends of B20 or less, and if you are not a distributor and the plant is small like american ag fuels in ohio they will sell B100 (really high quality fuel) for like 3 a gallon

hope this helps
later
Justin