Diesel fuel penalty

[Redsky]

I knew when I bought my diesel truck that the cost for the truck was going to be $9,000 more and that I would be paying twice as much for maintenance and repairs, but I did not expect to be paying more for diesel than for premium gas.

I have been checking prices and locations for a trip planned through California, Oregon, Idaho, Montana, and Nevada this year. I was surprised in checking Pilot truck stop prices how much more they are charging for diesel over premium gas.

In California the difference is on average 8 cents.
In Oregon the difference on average is 22 cents.
In Idaho the difference on average is 55 cents.
In Montana the difference on average is 60 cents.
In Nevada the difference on average is 25 cents.

That difference in cost is twice as great when comparing diesel to the regular gas that a truck would be using. In Montana diesel is 90 cents more per gallon than diesel or 29% more expensive. That pretty much wipes out any gain in fuel economy from having a diesel engine.

[We_Cant_Wait]

Don't worry Fed. Gov is now wanting the sulfur content of gas lowered like they did years ago with diesel. The extra refinery steps needed to reduce the sulfur in diesel was 1 of the main factors in the price increase. So when the Feds require Ultra-Low Sulfur Gas, it's price will then be equal to or above Diesel.

[GoPackGo]

I agree with goducks10. I think the variance in state taxes is the biggest reason for the difference in the pump price of gasoline or diesel from one state to another.

[JamesBr]

ULSD is only premium in price because worldwide demand exceeds local country distillers ability. The US is exporting more ULSD then it ever has since 2009. Exports have gone from around 300k barrels per day of refined ULSD to over 900k per day. And with that so has the premium price on ULSD over regular gasoline which has gone from 159k barrels a day to only 576k barrels per day in the same time frame.

http://www.eia.gov/dnav/pet/PET_MOVE_EXPC_DC_NUS-Z00_MBBLPD_M.htm

[jmtandem]

Around the decade change of 1900/2000 the feds mandated that producers change to the new ULSD

More like a century than a decade (or ten decades)?

[Me_Again]

artguys wrote:
As can happen it starts in one direction then goes off the edge...so I'll make a this is my best attempt to outline what the disparities are about.

The factors concerning fuel costs today are:

Supply

Demand

Distribution

Producers accounting practices, LIFO(Last In First Out)

For the most part production is about cooking then distilling the crude. Those products that come from that process come off of the distillers at different stages. After coming off they are refined and filtered further, most that is. Transportation fuels in the middle, incl. Diesel Gas and Jet fuel...lastly are the tars, or more commonly known as the bottoms by the industry.

Around the decade change of 1900/2000 the feds mandated that producers change to the new ULSD(Ultra Low Sulfur Diesel) regs. And even after those costs for infrastructure changes were added to the production cost of diesel, it was still cheaper to produce. Now there are several things in play that dictated the eventual price at the pump for diesel being higher but the dominant three were demand, distribution, and Big Petros' dictating to Washington. Much like Big Pharma and their influences on Washington and their agencies the Petroleum industry can and do influence policy.

Autonomous? A little no...a lotta yes.

You missed "Market Speculators"! I would put them high of the list.

I grew up in the wholesale distribution chain, and price fixing has been a staple of the industry for years.

I even know who Mister X was! Yes the oil company insider that testified incognito before Congress in the early 70's.

Chris

[goducks10]

States have different taxes on fuel. Some may have higher diesel taxes or higher gas taxes. It's one of the reasons why fuel prices vary so much from state to state.

[2oldman]

artguys wrote:
As can happen it starts in one direction then goes off the edge...

That, and the OP is gone.

[artguys]

As can happen it starts in one direction then goes off the edge...so I'll make a this is my best attempt to outline what the disparities are about.

The factors concerning fuel costs today are:

Supply

Demand

Distribution

Producers accounting practices, LIFO(Last In First Out)

For the most part production is about cooking then distilling the crude. Those products that come from that process come off of the distillers at different stages. After coming off they are refined and filtered further, most that is. Transportation fuels in the middle, incl. Diesel Gas and Jet fuel...lastly are the tars, or more commonly known as the bottoms by the industry.

Around the decade change of 1900/2000 the feds mandated that producers change to the new ULSD(Ultra Low Sulfur Diesel) regs. And even after those costs for infrastructure changes were added to the production cost of diesel, it was still cheaper to produce. Now there are several things in play that dictated the eventual price at the pump for diesel being higher but the dominant three were demand, distribution, and Big Petros' dictating to Washington. Much like Big Pharma and their influences on Washington and their agencies the Petroleum industry can and do influence policy.

Autonomous? A little no...a lotta yes.

[Hammerhead]

My assumption is that the original poster is wondering why the price difference between gasoline and diesel varies so much from state to state.

I'm guessing demand for heating oil in some states pushes diesel prices up in the winter.

RAS43 wrote:

RinconVTR wrote:
Everyone is focused on the fuel cost vs all the other points the OP brings up. Interesting.

The OP only brought up the fuel costs. What other points?

[Dave_H_M]

:S Slap the dog and spit in the fire.

Why did we kick off with comparing diesel to premium? My gasser pulls just fine on 87 octane.

[monkey44]

GoPackGo wrote:
Monkey44 wrote - "I find that hard to believe - if you buy a diesel today, at say anywhere from $7k - $9K over a gas version, and you get down around 250K-300K miles or so, you have an older worn out body and seats, and heater, and A/C, and wires, and alternators, and undercarriage, and etc etc... So, what makes anyone imagine a truck of that age will bring $7k or $9k more than a gasser, "

I did not say you would get back 100% of the additional premium that a diesel will cost. I said 'a lot' - and I stand by that statement. Compared to a gas engined truck with 250-300k miles on it (maybe already rebuilt at least once ?), the same truck with a diesel engine will be worth much more.

Yeah - I know what you mean -- but in order to get any kind of return on the diesel part of the truck, the rest needs to be in good shape too, and when you add in all the other costs for items that simply wear out over high mileage, it seems like that cost factor will not be as great.

Let's face it, if you get 500K miles on a diesel, the rest of that truck is 500K miles worth of wear and tear. So, that will always be a factor in selling - not many folks will buy a perfect diesel engine in a beat-up worn out truck ... and that kind of wear will happen regardless if we take good care of it ... it just flat wears out ... all the auxiliary parts (window motors, seat motors, A/C - wire harness, etc. is also 500k miles too ... So, we need to consider the whole package, not just the engine.

SO, I still maintain the main reason for a diesel is power, pulling heavy loads, not the resale factor.

[coolbreeze01]

Hard to imagine anyone buying a tractor to pull 80K, and specking it without a Jake.......

[brholt]

skyhammer wrote:
Where I live on the NW coast of Calif. diesel is about 10 cents cheaper than premium.
Empty, my DRW gets about 5MPG more than my half ton truck.
Fully loaded I get between 10-12MPG with the DRW.
Carrying 1/5 the weight of the DRW, my 1/2 ton gets 8MPG fully loaded.

Interesting numbers. My 6.2L DRW CC averages 9 mpg carrying a 5,000 lb truck camper running around in Washington, Oregon and Idaho.

[mtofell1]

There may be a bit of a move away from diesel for the casual RVer with some of the newer gas engines being introduced. The premium for the diesel engine at time of purchase + the higher cost of fuel + the growing complexity and emissions on the new diesel engines are turning some people away.

Of course, if you haul enough weight that you NEED a diesel there is no substitute.

Something that is a bit overstated in these threads is the surcharge at time of purchase. It's list price is around $7500 MSRP which most savvy shoppers get about 20-25% off of. So, really it's closer to 5-6K. Still a lot of money but a lot less than 9K as has been stated.