The familiar fuel price sign at every gas station seems to suggest that Diesel is the most expensive gas for your car. We own a diesel and a gasoline car and I wanted to explore to see how much truth there is to this statement. We bought out first diesel car for many different reasons (one of which being the fact that disel is a more efficient gas in terms of the miles per gallon that we could travel). See my previous post in which I talk more about it.
Its been nine months since we bought our diesel car and I looked back to the average price for gasoline (regular and premium) and diesel for this period. The results mostly validated our pre-purchase analysis - Diesel is a more efficient and cleaner fuel but needs to be incentivized further for widescale adoption in the United States. See below for a graph of the fuel prices in the State of California (where we live) during the nine months from Oct 2013 to July 2014.
Summary of the graph:
1. The price of diesel is more stable as compared to gasoline (both regular and premium)
2. Price of gasoline seems to be more seasonal - tends to get more expensive during the summer months
I applied the average price of diesel and premium gas to my situation as shown below:
Clearly, we saved about $560 in fuel prices so far. Although the dollar savings of $560 were in comparison to the premium gas(the gasoline version of our car would need premium gas), driving a diesel car costs less than driving a car on regular gas as well.
Besides being more efficient(less expensive), diesel is also a more cleaner fuel(good for the environment) and its gives drivers a much higher low end torque (ability to pull off from the stop light more powerfully). Then why isnt everybody buying a diesel car?
A few reasons why this could be true are:
1. Diesel cars are a little more expensive than their gasoline counter-parts. The difference in price ranges anywhere from $600-$2000. Most owners would like to make sure that the savings in fuel compensate the additional price premium at the start. This again is a function of how long they plan to own the car.
2. The re-sale market for Diesel cars and the value of used Diesel cars in not known.
Diesel however is the more popular fuel in many European and Asian countries mostly because of the fact that diesel is the cheaper of the fuels there - no brainer.
There are quite a few new alternate forms of fuel under research and/or use including electric, hybrid, solar et cet ra. and some of them might actually go on to become the fuel of choice in the future (long term) but as a near term solution, advanced diesel cars which run on ultra low sulpur Diesel a.k.a Diesel 2 can be a prime candidate. This however will require policy changes that aid to reduce the cost of diesel cars (either through subsidies to the manufacturer or to the consumer) or to improve the used car market for diesel cars. Time will tell how the market evolves but either way its exciting times ahead!
References:
Link to the worksheet used for the analysis can be found here
Links to gas/Diesel Prices for California from Oct '13-Jul '14
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