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Car Forum / Mercedes-Benz Cars / May 2005Diesel More Expensive Than Gas
We all thought diesel would remain cheaper than gasoline, but we were wrong. There goes one reason to own a diesel-powered car. But I haven't spoken with an old diesel Benz owner who was too pissed. The car's qualities still outweigh high diesel cost. Then I started looking for a reason why diesel fuel is so damn expensive. The reason: PRICE GOUGING. I work for a company that owns a few gas stations. I receive a fuel quote from our fuel supplier every single morning on weekdays, Friday quote carries over to Saturday and Sunday. Today's (Thursday 05/19/05) quotes were as follows: Regular - $1.57 cost Premium - $1.69 cost On Road - $1.56 cost diesel Off Road - $1.54 cost diesel ====================================== Gas Price - $1.99 retail Diesel Price - $2.25 retail Location 1 Diesel Price - $2.19 retail Location 2 As you can see, diesel is bought by the gas stations cheaper than regular gasoline. It is then sold for about a quarter more per gallon then regular gas. The owner told me they do that to offset their losses on regular gas since the market is so highly competitive. Bullshit. No one is offsetting anything - there's not enough volume in diesel to help with competition in regular gasoline market. They gouge the prices, and we take it. Tootles. Mia J. In talk.politics.guns "Mia" <maxvalery@gmail.com> wrote: >We all thought diesel would remain cheaper than gasoline, but we were >wrong. There goes one reason to own a diesel-powered car. But I [quoted text clipped - 24 lines] >diesel to help with competition in regular gasoline market. They gouge >the prices, and we take it. I never paid that much attention to diesel prices, only noting that they were generally lower. Now that I have an MB I naturally notice them all the time. But in a short 200 mile trip in my home state, I have seen prices run the gamut from more than premium gas, to less than regular. I think I'm going to get a papier-mache tractor to put in my back yard, and start buying it in bulk.. >There goes one reason to own a diesel-powered car. Oh, please, the economic metric for diesel vs. gasoline isn't dollars per gallon, but miles per dollar, where diesel still wins hands-down. > No one is offsetting anything - there's not enough volume in > diesel to help with competition in regular gasoline market. Exactly, this is called the economies of scale. They need to have a pump occupied pumping this diesel, even though as you state above they sell a lot less of it. This is not "gouging". Marty I don't know that I buy the economies of scale argument, especially since it's certainly not reflected in the cost of the product in the above example. All the stations here have just one pump devoted to diesel, about 8 others pumping gas. The single diesel pump isn't taking up very much space and it's hard to imagine that the diesel can't support more than it's fair share of the volume, especially considering many trucks that are filling up take many times what a car would. > I don't know that I buy the economies of scale argument, especially > since it's certainly not reflected in the cost of the product in the [quoted text clipped - 4 lines] > considering many trucks that are filling up take many times what a car > would. You can say that again. I pulled into a Chevron station the other day to fill up my 240D and the dollar value still on the pump was almost $500! This was at the cheapest station within many miles and I'm sure some trucker was glad he only needed about 210 gallons. >pump occupied pumping this diesel, even though as you state above they "Pump occupied" my a.s, darling. Installing a diesel pump is a sunk cost, that's why the "it cost to run the pump" argument doesn't work. Also, it's commonly known that price increases happen overnight, but price decreases happen very gradually - it's a small business owner thing. One of the factors keeping diesel prices high in comparison with regular gas is cut-throat competition in regular caused by high inelastic demand. Any business owner will tell you that they will purposely keep diesel prices higher because the margin is a bit better. That's why I'm calling their bullshit and saying it shouldn't be as high. They buy it for LESS than regular, it DOESN'T COST anything to keep the pump running, and it SHOULD be cheaper than regular gas. Just an opinion. Mia J In Britain diesel has in recent been very approx same as standard unleaded petrol, whereas in a number of west-European countries the diesel price is significantly lower, all because of taxation policy. However, the price difference is usually 'compensated for' in other taxes, such as extra tax on diesel-engined cars. DAS For direct contact replace nospam with schmetterling --- > >pump occupied pumping this diesel, even though as you state above they > [quoted text clipped - 17 lines] > > Mia J > In Britain diesel has in recent been very approx same as standard unleaded > petrol, whereas in a number of west-European countries the diesel price is > significantly lower, all because of taxation policy. > > However, the price difference is usually 'compensated for' in other taxes, > such as extra tax on diesel-engined cars. Compared to the USA, "significantly lower" still means a lot more. In Holland the cheapest diesel at the moment is 92 eurocents per liter, which is roughly 3,50 euro for a US gallon, or approx. 4,40 US dollars for a gallon. Regular unleaded costs about 4,90 euro/US gallon or approx. 6,20 US$/US gallon. Car tax for diesel cars in Holland is higher. Tax for my 1980 W123 200D is 996 euro per year (or 1255 US$). If it had a petrol/gasoline engine, I would only pay 516 euro per year (or 650 US$). Fortunately I don't have to pay car tax anymore, because my MB passed its 25th birthday and then you get an exemption. I'd fill my 1,000-gallon tank if I could buy diesel at your quoted price. Where are you located? > We all thought diesel would remain cheaper than gasoline, but we were > wrong. There goes one reason to own a diesel-powered car. But I [quoted text clipped - 28 lines] > > Mia J. |
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