This never ceases to fascinate me.

FACTS.

1/ Petrol is more highly refined than diesel.
2/ Thus one can say 'producing diesel is cheaper than producing petrol.

Hence the question..

WHYYYYY do we get charged 15% or there abouts MORE for Diesel?

I'd love to know the answer to this..and I'm sure a lot of truckies would also!

Those who have more 'facts' to throw in.. please do so.

Becuase more and more people are starting to use it and the milage you get from diesel is better, I believe.

The term I think is, 'cash cow'.

Boazy, as the owner of a diesel-powered truck, I've asked the same question. The answer I usually get is that it's because all of Australia's diesel fuel is imported, whereas we refine much of our own petrol.

Mind you, who knows whether that's really the reason... I can recall a time not too long ago when diesel was always cheaper than petrol.

Good Morning David,

I agree with STG. There's a higher tax on diesel because more people use it. A diesel powered engine is more efficient than a petrol run equivalent - you get more miles per gallon, so it's more economical in the long run, even though its more expensive per litre.

You may be interested in the following website:

http://www.petrolprices.com/why-diesel-costs-more-than-petrol.html

Dear folks..
since I began the thread I did some more research and found that due to new emmission requirements calling for 'VLS' (very low sulphur)content and ULC (ULTRA LOW) .. the refining process is in fact more costly!

What I've not discovered yet is whether this applies to the Australian situation.. as the emmission regs are EU.

If they DON'T apply rigidly to us, then the situation is immoral to say the least.

Surprised? Me too..

I recommend anyone interested in more detail explore this.

Apparently it also depends on the quality of the crude.. as to how much more expensive the refining is.

So.. on the surface the refining is lower... but due to emission standards.. it requires more special treatment.

As for cash cow.. and taxes.. well I was already hyper cynical of governments and there is nothing to convert me to there :) but yes..I tend to agree.

Some figures would be welcome.

Let's SHAME em.

QUESTIONS to explore

1/ Are we in Australia subject to the rigid emission VLS ULS regs?
2/ If not.. WHY the (multiple relatively benign expletives:) are we being charged for diesel as if they DID apply?

*puts on the black attire and combat boots* :)

Low sulphur content regulations (50ppm) do apply in Australia and have for some time now.

http://www.racq.com.au/cps/rde/xchg/racq_cms_production/hs.xsl/Motoring_Maint_Repairs_Foun_factsheet_low_sulphur_diesel_ENA_HTML.htm

Also, Australia is going to be going to 10ppm sulphur (Ultra-low) by January 2009, so you can expect the refining to get more expensive I guess.

Part of the problem may lie with the refineries. There is currently an abundance of heavy crude on the market, but a lack of refineries able to process it.

http://www.guardian.co.uk/business/feedarticle/7577722

For low sulphur diesel you could always make biodiesel from used chip fat. And if you have town gas you might also have the option of converting your vehicle to cng, with a fuel cost equivalent of about 27 cents per litre.

The price of fuel is driven by the hedge funds.Qantas for example bought todays fuel a few years ago at much lower prices.This buying of fuel based on futuristic prices inflates it's real value.Now what the various hedge funds must do is to predict future prices.If Qantas for eg buys at todays prices in the hope that they will rise,they could fall flat on their faces.

If Saudi Arabia and others produce more oil and the refinery capacity is there,the price could suddenly collapse.

There is plenty of energy on the planet,it is just the opportunists screwing us as they have done so in the past,only this time,under the subterfuge of peak oil and the green movements CO2 guilt trip,they are doing it with impunity.

Fantastic!

I never realized we could come up with so much interesting and useful information about this.

Onya's Bugsy, Fester and Arjay :)

Lets hope it assists us in making decisions about what kind of vehicle we buy, and what hopes we have for it, and perhaps the political aspect can be kept in mind also.

- I am now much better equipped on this, as I'm sure we all are.

POLITICAL CONSIDERATIONS.. why of course it all means we must now vote Family First..... (gotcha :)

Kidding... no, really, it may mean that we can expect our Government to perhaps do something along the lines of

-requiring petroleum companies to install certain technologies, and
-making critical catalyst material available at low cost...
-Prohibiting large economic entities and speculators from driving up prices by specific economic strategies.

SPECULATION.
Of high priority..it should be a crime for anyone to buy and then hold large quantities of oil, then release it when the price has skyrocketed. Sadly, the personal wealth of some high profile individuals is such that they can do this, along with hedge funds and other large entities.

Of course, such legislation should be limited to 'essential commodities of national importance' or no one would do anything.

Most commercial users get $ .18 / litre rebate.

They can also now buy a system that injects natural gas into the fuel supply and achieve up to a 20% decrease in consumption.

Just returned from the diesel expert for the second time today. After spending $3,500 refurbishing injectors, diesel pump, etc eighteen months ago I then experienced a 20% increase in fuel consumption. Hopefully, I will be back to the normal 10.8 litres / hundred and have even on the rare occasion achieved 9.8 l / 100 in the past.

My recollection is that the Greens manoeuvred for a price increase on diesel back when GST negotiations occurred. Don't forget that the USA has not built a refinery for 35 years. What are the stats on Australia in this regard?

There may be more diesel used by volume but there certainly isn't more diesel users compared to petrol. Some petrol stations do not even have a diesel bowser.

There lies another reason why diesel is more expensive -- fewer voters are directly affected, even though the cost flows on to virtual all delivered goods.

subterfuge of peak oil and the green movements CO2 guilt trip,they

Arjay is spot on.

David

When a commodity market is suspected by the regulators to be manipulated, they have the power to alter the margin. This was used with effect when the Hunt brothers were heavily into silver futures.

Oil futures currently carry an 8% margin. There is no reason why the margin could not be raised to 100% or higher. Exemptions could also be granted so that legitimate users like airlines would not be unfairly penalised. At least this measure would indicate whether the high price was a result of manipulation or supply/demand factors.

But at least take small consolation in the development of renewables and alternatives that the high oil price will accelerate. Oil refineries may even play a pivotal role in the production of biofuels.

http://www.biomassmagazine.com/article.jsp?article_id=1731

Some more interesting info for you.Qantas consumes 25% of all liquid fuels that our economy consumes.30% of your air ticket is currently fuel.When Qantas' current hedge prices are used up,their airfares must rise sharply.I would be very dubious at hedging at current prices,since they Qantas may be locking themselves into an over inflated fuel prices.Interesting times eh?

Arjay;
I think Qantas reset its forward buying price last year from
memory. I think I read where they purchased at $70 per barrel equivalent.
I recollect that their previous hedging ran out last year.

It is easy to forget the details and it could have even been the previous year.

Arjay;
I doubt that Qantas uses 25% of all petroleum fuels in Australia.

Australia uses around 900,000 barrels a day so 25% is 225,000 barrels.
Do you really believe all that oil would fit into all the aircraft ?

Really ?

Bazz,I'm just relaying info from a Qantas executive.Their fuel bill next yr is set to increase by $2 billion as their hedged fuel runs out.This will wipe out all their profits.Their profit for last yr was $1.5 billion.This is why they are now cutting services that are not that profitable.

Bazz I just did some stats. 225,000 barrels only produces half of its quantity in fuel.One barrel produces approx 20 gallons of usable
fuel.So for Qantas to use 2.2 million gallons of fuel per day,is not drawing a long bow.