Gasoline and Diesel Fuel Update

From the US Energy Information Administration, http://www.eia.doe.gov

As fuel prices continue to rise, evaluating your engine options may a good idea. Because, whether you buy a vehicle that runs on gas or one that runs on diesel can be a very difficult decision.

Currently, gas is less expensive than diesel, but not by much. Generally speaking, if your vehicle is used in a local, low mileage operation, then a gasoline truck may suit your requirements better. Diesel engines tend to be more economical over longer distances and are therefore better suited to high mileage operations. Diesel engines are also more suitable for heavier work and typically have longer engine life.

There are a number of issues that need to be taken in to consideration, like purchase price, noise, re-sale value, idle time and effect on the environment. Another important consideration is vehicle performance.

Diesel powered vehicles are more expensive and noisier than their gas powered counterparts. Diesel powered vehicles retain their value due to the economies and the longer engine life. The new style of diesel engines produces less “smog”, although overall the levels released are still higher than gasoline engines. However gasoline engines release more of the carbon dioxide gases which have been directly attributed to global warming.

Regarding vehicle performance, let’s look at the following example:

Cable Company “A” has a fleet of gas powered vans with aerial buckets. These gas powered vans typically get about 6 miles to the gallon and cost about $50,000 each including the lifts and all of the upfitting. Vehicle Manufacturer “B” is offering a diesel powered van that gets between 20 to 25 miles per gallon, but costs about $20,000 more than the gas powered equivalent.

At what point does the economy of the diesel overcome the increase in cost required to purchase the diesel?

Using the National Averages of $3.562 for gas and $3.907 for diesel, there is a difference of $0.345 per gallon between gas and diesel. As you can see the case for Gas vs. Diesel becomes more obvious the more mileage that your vehicles run.

10,000 miles per year at 6 miles per gallon = 1666.66 gallons of gas per year x $3.562 per gallon = $5,936.64 per year in gas fuel cost.

10,000 miles per year at 20 miles per gallon = 500 gallons of diesel per year x $3.907 per gallon = $1,953.50 per year in diesel fuel cost.

20,000 miles per year at 6 miles per gallon = 3333.33 gallons of gas per year x $3.562 per gallon = $11,873.32 per year in gas fuel cost.

20,000 miles per year at 20 miles per gallon = 1000 gallons of diesel per year x $3.907 per gallon = $3907.00 per year in diesel fuel cost.

30,000 miles per year at 6 miles per gallon = 5000 gallons of gas per year x $3.562 per gallon = $17,810 per year in gas fuel cost.

30,000 miles per year at 20 miles per gallon = 1500 gallons of diesel per year x $3.907 per gallon = $5,860.50 per year in diesel fuel cost.

Obviously, real numbers may vary due to a variety of factors, but a case can be made for Company “A” to consider buying some diesel powered vehicles, even if the diesel powered vehicles have a significantly higher purchase price. Especially, if company “A” keeps their vehicle for 7 to 10 years. 

In closing, there are many issues to consider when making a decision whether to purchase gas or diesel powered equipment, these are but just a few. In the future, fuel prices are sure to rise, as are the taxes on fuel. So, be prepared.