dlevi67

But it seems it is. This document from the EU on levels of tax on passenger cars is dated 2002, and it says (p 7):

totally coincidentally, the last fuel station I saw yesterday at Charles de Gaulle airport had the following prices:

Unleaded € 1.16 /l
Diesel € 0.996 /l

it may seem that the differential over the last five years has not changed much...

Edit: I screwed up the prices. Re-checked on a site, and it seems the 0.87 must have been CNG or whatever, as Diesel should be ~€ 0.85 + TVA@19%. Current prices in the post are "lowest in Paris region"

aybeesea

Seems it isn't:

24 Feb 2003

http://www.parliament.the-stationery-offic...xt/30224w52.htm

and more from 28 May 2004

http://www.transport2000.org.uk/news/maint...wsArticleID=168

ABC

dlevi67

I fail to see what those two have got to do with the differences in relative taxation between Diesel and petrol in different countries. The first document refers to

and the answer seems to be that

Nothing to do with the difference between petrol and Diesel, but all to do with the difference (or otherwise) in duty between Diesel used for different forms of transport (naval, road, private, commercial etc.). And anyway there is almost uniform opposition to this.

The second document refers to levels of duty only in the UK, noting that they have increased by the same amount (or were planned to increase by the same amount). The only reference to other countries - quoting a 2001 source - says:

Which is consistent with the quote from the EU document in my previous post (indicating that the UK has relatively low "fixed" transportation duties (road tax, etc.)), and with the hypothesis that fuel duty on Diesel is higher in the UK than in other places, since it is fixed at the same level as on petrol.

aybeesea

Exactly.

So why was diesel 5p a litre cheaper than unleaded 5 years ago and now is about 3 or 4p more expensive?

It can't cost 8p a litre more to manufacture (considering what small proportion of the pump price is wholesale pretax price).

ABC

the-oneil

Agreed 100% - I always thought diesel must be cheaper than petrol as it is more crude (if that's indeed the right word) and therefore cheaper to produce. Other EU countries has the diesel cheaper than petrol and therefore it makes even more sense to drive diesel, in the UK the fuel saving from a diesel is to a small degree ofset by the 5% increase in the diesel price over petrol.

aybeesea

High sulphur (heavy) diesel is cheaper to produce than low sulphur (City) diesel but neither require the refining that petrol does. It IS a different process and one of the arguments I've heard is that UK diesel production capacity is insufficient to meet increasing demand so 'ready-made' diesel has to be imported. Hmmmm...

As for diesel being 5% more expensive being offset by its more efficient combustibility (and consequent economy) of course that's what the price setters want punters to think about and line their coffers even more.

ABC

Raighne

It sounds like you are just being shafted ...
Fuel is a relatively inelastic product and because of this, usually, governments have to intervene to regulate prices.
What I don't understand is... is the UK government just standing idly by or are they the ones supporting and benefitting from expensive diesel?

dlevi67

I can't say I have noticed Diesel in the UK ever being cheaper than unleaded. Neither has the International Road Transport Union.

However, it seems that a significant decrease (5p) in Feb 05 in the price of unleaded was not matched by Diesel, and the two have been moving in parallel 4-5 p apart since. The interesting thing is that the same thing is happening in other countries - see here for historical prices in 35 or so countries. From late '04 - early 05 Diesel prices have risen more than unleaded anywhere in the Euro big 5, and the historical differential is being eroded.

Either the conspiracy is global (possible, and even more likely given who controls pre-tax price), or greater demand for Diesel is straining the ability to produce (or it is generating excess capacity in petrol production), or the effective cost of producing ULS fuel is higher for Diesel than for Petrol. I wonder if the fact that the US has recently moved over to ULSD (officially completed mid-October 2006) has anything to do with this?

aybeesea

Hmmm... 'Ever' is a long time and since the graphed data is irrefutable (by me at least!) I have to say that it doesn't go back far enough because when I started driving diesels before (OK you'd say 'conveniently' - but it's true) the graph starts, diesel had always been cheaper in UK as everywhere else.

I believe I made those points on behalf of the producers. Neither factor can account for a 5p/litre price differential.

Other territories producing ULSD for the USA and reducing the supply to domestic markets? I'm sure that there's an economic rationale but I'm of too little brain to see it

http://www.cfit.gov.uk/plenaries/0501mfp3.htm

ABC

dlevi67

You said "5 years ago". I found data that goes back nearly 10 years, and then you complain that that's not far back enough... You are starting to sound like my wife. Or my clients.

My point about the US is really about global capacity. If US demand for ULSD is rising, so will prices - globally, since a) it's a globally-traded commodity and b) the US is by far the largest market. Whether there is a "fair" rationale for the price rising, or whether we are being shafted, I cannot say. But at least if we are being shafted so is everybody else in Europe. (meagre satisfaction)