Change In Demand For Fuel Reduces Gap Between Petrol & Diesel

Sunday, 8. March 2009

Fuel prices seem to have settled for a while but concerns have been raised about the differential between petrol and diesel. In November 2007 the difference was 2.6 pence per litre. When the cost of a barrel of oil increased to $147 in July 2008 the price differential increased to 14 pence per litre. Whilst oil prices have dropped back to less than $50 per barrel the differential between the two fuels is still at 3 times the differential of a year ago. The Petrol Retailers Association has argued that as the refining capacity for diesel is less than petrol so the price will always remain higher for diesel. Now I might be a bit daft but doesn’t this only apply when you are running close to full capacity – Hmmmm, see my story above that we travelled 3.1 billion miles less last year. Back to the article. Whilst the cost of a diesel car is much closer now to the cost of a petrol equivalent the cost of running a diesel car is increasing as a result of the fuel differential. Maybe it is time to re-consider the petrol alternative. VW brought out a new 1.4 petrol engine last year that is capable of generating 180 bhp providing power along with economy. Other manufacturers are following suit. When covering just 10,000 miles per annum it is unlikely that you will see savings in fuel costs throughout the first 3 years. Experts suggest that a diesel engine only becomes efficient after it has covered 20,000 miles and there are constraints attached to the fitting of particulate filters which could end up with some fairly hefty replacement costs if the filter becomes clogged and it isn’t covered by the warranty. So don’t automatically assume that a diesel car will be cheaper to run than a petrol when considering the options. By Graham Hill