Diesel or Gasoline?

I hear a lot of questions about the economics of a diesel engine versus a gasoline engine, given the fact that diesel prices are now much higher than gasoline (and likely to remain that way).

Diesels have two things going for them. First, a gallon of diesel contains more energy than a gallon of gasoline. Second, a diesel engine achieves a higher compression ratio, and gets more useful work out of the engine. Diesels are estimated to be around 30% more efficient than combustion engines.

I checked the EPA’s site on fuel efficiency – http://www.fueleconomy.gov – and compared a 2009 Volkswagen Jetta on diesel versus gasoline. Comparing identical cars – 2-L, 4-cylinder, 6-speed manual transmission shows that the diesel version gets 36% better fuel efficiency.

If I factor in diesel’s higher price – the EPA assumed $4.65 for diesel and $4.33 for premium gasoline – it costs $3.42 to drive 25 miles on diesel and $4.33 to drive 25 miles on gasoline. The annual fuel costs, assuming 15,000 miles of driving, was $2051 on diesel and $2598 on gasoline.

The diesel engine will set you back a few more thousand dollars than the gasoline engine. It is hard to get a direct comparison, but a search of Edmunds indicates that Volkswagen’s diesel models are at least $2,000 more expensive than comparable gasoline models. If we assume no time value for money, you are going to have to drive about 55,000 miles before you save $2,000 in fuel costs (based on today’s prices).

It just wouldn’t pay off for someone like me who doesn’t drive more than 5,000 miles a year. I am not even sure I drive enough miles to justify paying the extra cash for a Prius. I need to run those numbers next.

39 thoughts on “Diesel or Gasoline?”

  1. The real advantage of a small diesel will show up if shortages (or rationing) occurs. Then one will be able to travel a lot further on one tank of fuel than most alternatives.

  2. While the EPA fuel economy numbers are fairly accurate for gasoline cars, they seem to underestimate the fuel economy of diesels. People have been reporting that the new Jetta TDI’s are getting closer to the high 40’s in fuel economy compared to EPA’s 40mpg estimate.

    As for whether or not the price premium for the Prius is worth it for such a low mileage driver, you have to look at the car you would buy if you did not buy the Prius. If it’s something like a Civic or a Fit, then no it will never pay off from an economic standpoint.

    For me, I was comparing a Prius to a Mazda3 hatchback driving 7500 miles/yr and it was worth it to me to get the Prius even though the breakeven point is 7 years out.

  3. Tangentially related… 🙂
    Robert, any thoughts on this?

    _____________________

    “The federal Minerals Management Service reports that
    out of the almost 9 billion barrels of oil that are thought to exist offshore, 80 percent of them are already open to the industry,
    mostly in the Gulf of Mexico and Alaska.”
    http://www.alternet.org/environment/90828/

  4. Diesels are also reputed to be more durable than gasoline engines, so maybe you can get more life out of the vehicle, or benefit from a higher resale value.

  5. Thank you for the clear comparison of gasoline versus diesel.

    Robert, I have a refining question: does all the extra gasoline produced from the extra steps beyond simple distillation cut into what otherwise might have been diesel?

    On another level, diesel, like kerosene, does not have an unpleasant odor. Gasoline smells like poison, imo.

  6. With diesel, though, you’re also limited to brands that have diesel options.

    In the case of VW, that means having to choose a car that has a name brand price tag premium, is relatively unreliable, and has expensive parts and service.

  7. Russ, I have also wondered about the relationship between refinery control, efficiency and consumer demand. It seems obvious that diesel fuel requires much less energy to distill than does gasoline, but it is somehow more expensive. Perhaps stripping sulfur out of diesel is expensive or energetic? Perhaps diesel has a less elastic demand than does gasoline? Maybe gasoline has to be made as a necessary byproduct for other high demand distillation products?

    I have been a proponent of diesel engines for a long time and would like to know why the prius doesn’t nix that goofy globe trotting(production) trunk battery and use a series hybrid diesel plant and go 80mpg. Half or more of passenger autos sold in Germany have been diesels for quite some time. If you go to most european auto websites, almost all models sold in the US have a diesel option.

  8. Robert, I have a refining question: does all the extra gasoline produced from the extra steps beyond simple distillation cut into what otherwise might have been diesel?

    It’s quite a bit more complicated than that. You could build a refinery more tailored to produce diesel, and that would in fact take away from what went into gasoline (or vice-versa). In an existing refinery, you have just a little bit of leeway, and what you swing to gasoline partially comes out of diesel.

    On another level, diesel, like kerosene, does not have an unpleasant odor. Gasoline smells like poison, imo.

    Diesel is less volatile, so you don’t get as strong of a smell as you do off of gasoline (which also contains some pretty aromatic components).

    RR

  9. Grey – you gotta stop reading the leftists greenie blogs for getting information on energy issues.

    Let’s assume that the MMS quote is accurate and not taken out of context. The issue isn’t the volume of reserves, but where they are. Reserves that are 250 miles offshore in 6,000 feet of water and 15,000 feet below the sea floor will be extremely costly to develop. Size of the fields also matters. Lots of little fields will add up to substantial reserves but may be uneconomic to develop. The 1002 is a potentially huge onshore field near existing infrastructure. Same for offshore CA and other places. Furthermore, once new reserves are available for development, international oil companies will move in. Even though it could be a few years to get to market, OPEC producers will increase production NOW at higher prices to maximize revenues in anticipation of losing market share later.

    The Sierra Club article is about as asinine as the Harry Reid talking points on new acreage. And so was this point from your article:

    By opting for clean sources of energy, such as solar, wind and geothermal, we would end our dangerous oil dependency.

    No it won’t – idiots. In the US oil is used for transportation. Solar, wind and geo are used for power generation. It might lessen our dependence on coal, but won’t do much for oil.

  10. The diesel cummins engine, found on some Dodge trucks, is regarded as nearly heroic in its durability. 400k miles means nothing on this engine. You can run it on restaurant oil, as alluded to by an earlier poster.
    So, you can buy a used Dodge p/u for $7k or so, get it converted to run on bio (restuarant oil run through onboard filters), and skate through the next few years…..or a scooter for short hops….
    as a nation, if diesle really gets 30 percent greater mpg, such engines should be mandated by law….

  11. I like the smell of gasoline – especially when I was blending it. I like using xylenes, it gave the gasoline a very nice sweet smell.

    Let’s slaughter that sacred cow – the Toyota Prius. I’ve run the numbers multiple times. Pick any comparable high MPG convetional car of a similar size, you can’t drive enough even at $4 to justify the extra cost of the Prius.

    Compare the Ford Focus to the Toyota Prius. The Focus is classified as a compact but has just 3 cu ft less interior space than the Prius (93 vs. 96). The Focus gets 28 MPG vs. 46 for the Prius. But the Focus costs $7,100 less on MSRP. Driving 12,000 miles per year at $4/gallon you would save just $672 in fuel per year with the Prius. It would take you 10.5 years to recover the difference in costs. Most people don’t keep cars that long.

    To sweeten the deal Ford will give you up to $2,000 rebates on the Focus – if you can find one!

  12. I’m also not sure why Diesel prices have skyrocketed that much. Is demand for diesel from oil companies just much more inelastic than gasoline demand?

    As far as gas vs. diesel vs. hybrid, I think the way to go is still a small manual gasoline car. Hybrids can only do so much with batteries only charged with gasoline/regenerative braking. Diesels appear to be so popular in Europe due to much lower tax rates on diesel.

  13. A couple of things:

    What’s up with running diesels on DME (dimethyl ether)? Volvo is field testing 14 trucks on the concept. I haven’t heard of doing this before (except for cold starting tractors), but from what I understand it’s relatively easy to produce DME from syngas (possibly bio origin), it stores under low pressure like LPG and takes very little to convert a diesel engine to run on it. Is there some major hole in the DME idea I am missing?

    On diesel reliability: We have a Peterbilt 377 with a Cat diesel with about a million km on it. No major problems except for the turbo. The truck leasing company that owns a building we rent runs most of it’s highway tractors to 2.5 million km and then converts them to grain trucks which have a lot of years of service left in them. There are lots of John Deere and other diesel tractors built in the 1960’s that have run every day for 50 years without any major service and have clocked 10-20k hours (which would be 600k-1.2m miles at highway speed). I think the fundamental problem with small passenger car diesels is that a lot of the big-iron reliability goes when they try and build high-compression diesels as light as possible.

  14. Bob – nothing wrong with DME except there is no market for it. Yes you can make it very easily from syngas. Much cheaper than syngas to FT liquids.

    I paid $11,200 for the KingofKaty hybrid including rebates and incentives. I’m getting 24 MPG mostly city driving. On my home commute I get as high as 33 MPG. Even with that modest mileage it would take me over 10 years to pay out the Prius.

    I don’t know if RR was looking for a new vehicle, but the Saturn Astra looks like it might be a nice commuter car.
    KingofKaty hybrid

  15. To sweeten the deal Ford will give you up to $2,000 rebates on the Focus – if you can find one!

    Ford gives rebates on cars in such demand you can’t find any? No wonder they’re going backrupt.

    Seriously, your comparison is silly. Even if you adjusted the Focus and Prius MSRPs for equipment levels, which I doubt, you’re still comparing apples to oranges. A big chunk of your cost different has nothing to do with hybrid technology, it’s the “Toyota premium”. Camrys cost more than Tauruses for the same reason.

    Do apples-to-apples: Camry Hybrid vs. regular Camry. Adjust for equipment levels and the fact that Camry Hybrid has more power than the base 4 cyl but less than the V6. You come out with a hybrid premium of $1500-2000, depending on how much of a cost penalty you impose for the Hybrid’s smaller trunk. Fueleconomy.gov’s annual fuel cost is $1808 for Hybrid vs. $2500 for a non-hybrid Camry with equivalent power. That’s a 2.5 year payback.

  16. Comparing identical cars – 2-L, 4-cylinder, 6-speed manual transmission shows that the diesel version gets 36% better fuel efficiency.

    Ummm, Robert, these are hardly identical. I can’t be certain from the EPA site but the only 2L/4cyl Jetta I can find which uses premium gas is the 200 hp TSI. I’m not even sure VW sells this in the US (it’s available in Canada), but anyway it’s a much higher performance car than the 140hp TDI.

    The best VW comparo I ever saw was the Golf TDI vs. Twincharger. As sold in Europe both cars had identical HP and torque (170 hp IIRC). The TDI was 8% better on a CO2 g/km basis which is a pretty good proxy for engine efficiency. The Twincharger cost less than the TDI by $1000 or so. The difference would be bigger under US emissions standards.

    I think your $2000 diesel premium is based on 2L/4cyl/140hp TDI vs. 2.5L/5cyl/170hp gas engines. A 4cyl gas engine with mild boost to match the TDI’s performance would probably cost about the same, but would probably get better MPG on regular gas which would significantly lower the annual fuel cost vs. your comparison.

    BTW, doing these type of comparisons correctly (adjusting equipment levels, etc.) is very difficult. The car companies want it that way.

  17. Robert, thanks for the answer. Similar to Evan’s assessment, my guess was that diesel is easier to extract than extra gasoline after initial distillation.

  18. Seriously, your comparison is silly.

    Any comparison to the Prius is bound to be apples and oranges. Toyota doesn’t make a convetional Prius. Would anyone buy one if they did?

    I could argue that Toyota makes you buy the trim package and the “Toyota premium” when all some people really want is the higher fuel efficiency.

    So far I haven’t heard anyone gush over the Prius radio, seats or power options. If Toyota was so benevolent why don’t they make a Hybrid Corolla?

    It seems the one quality of the Prius is mileage. I’m just comparing it to high mileage conventional ICE models.

    I compared it to both the Chevy Cobalt and the Saturn Astra. Still wouldn’t buy a Prius.

  19. I could argue that Toyota makes you buy the trim package and the “Toyota premium” when all some people really want is the higher fuel efficiency

    If all you want is high fuel efficiency buy a moped.

    If Toyota was so benevolent why don’t they make a Hybrid Corolla?

    Benevolent? You’re joking, right?

    Why doesn’t Toyota sell stripper Priuses to compete with your stripper Focus? Because they don’t have to. You think Ford builds stripper Focuses out of benevolence? They’d love to load the base Focus with automatic, ABS, alloy wheels, traction control, keyless entry and a dozen other doodads for a starting price of $20k. But they couldn’t sell their entire production run if they did.

    Is a stripper Focus a better deal than a Prius? Is a stripper Camry a better deal than an Eddie Bauer Expedition? Does it matter? I don’t mind when people pay extra for leather seats and nav systems. Why do you care if people pay extra for high MPG?

  20. If all you want is high fuel efficiency buy a moped.

    I ride my bike instead.

    It really should be called the Toyonda Pious . When I point out that that the MPG of the Pious is a poor investment, Pious lovers change the subject to “it’s nicer or bigger or more smuggy” than a similar vehicle. It is the car which cannot be criticized – the status symbol of the neo-green.

    So let’s look at two nearly identical cars, the Honda Civic. The Hybrid model costs $7,500 more than it’s manual transmission sister and gets 42 MPG vs. 30. At 12,000 miles per year and $4 gas you would need to drive 16 years to get your money back.

    OR how about the Camry LE 5-spd vs. the Camry Hybrid. The hybrid costs $5,275 more than the LE but gets 33 vs. 26 MPG. That saves a whopping $392 in gasoline returning your money in just a little over 13 years.

  21. I think I weighed in on this one a few months ago. Here is my take on it: I have owned two VW TDIs, a 1999 golf, and my wife’s 98 NB TDI. I bought the golf for $10,000 cash with 10K miles on it. I made my own BD for a awhile but got sick of handling sodium methoxide, so I converted it to run on waste vegetable oil(WVO). It ran on WVO for about 40K miles before I sold it for $12,000 in 2007 with 117K miles on it. I took the injectors out one last time to check for coking but they look identical to the way they had looked when running on diesel, which is to say, clean. My wife’s car, was converted right from the start. I bought it used for $10,000 also with a brand new motor, the casualty of not changing the timing belt. It has now run almost 70K miles(my wife drives a lot) on WVO alone, using diesel only for startup and shutdown. I have never had a problem related to WVO, or the system I built myself, essentially a parallel fuel system that mimics the one VW spent millions perfecting. If I put the car on craigslist right now I could probably get roughly the same amount I paid for it. The WVO I have burned(averaged at around $2.50/gallon) has completely offset the amount I paid for the car. It save me, more or less around $400-500 a month. There are two lessons I have learned here. One, seeing a trend before it becomes common knowledge is a good thing. When I bought both car, no one wanted one. Most people either would not drive a diesel, or didn’t even realise that VW made one. Virtually every one I know is now looking for one, at least in CA, and the prices reflect this. The other thing it that it is obvious that biofuels are not going to keep us driving. In short, either most americans flunked basic science, have lost ability to do critical thinking, or simply believe what their new, big-screen TV tells them. I am now working on my own two seat tandem series hybrid EV. Small, light, three wheeled, made to be easily worked on with cheap parts. No timing belts, no expensive, cheesy, proprietary electrical parts… I am not going to make 5, or even 2, just one. I have yet to see what I consider a realistic plan for keeping our highways repaired, and I am not going to bet on it either. One thing is for sure, gratuitous driving is going to be a thing of the past, one way or another.

  22. So let’s look at two nearly identical cars, the Honda Civic. The Hybrid model costs $7,500 more than it’s manual transmission sister and gets 42 MPG vs. 30. At 12,000 miles per year and $4 gas you would need to drive 16 years to get your money back.

    The Civic Hybrid is most comparable in options to the Civic EX, at a little over a $3,000 premium. Here’s but one comparison with a few more miles than your example. Feel free to debunk.

    So, Is the Hybrid Civic Really Worth It?

    “In most cases, I think so, and under the right conditions, absolutely. Just look at the fuel mileage numbers. The hybrid bested the EX in every category, some by a larger percentage than others. Depending on the types of driving conditions/styles the Civic Hybrid owner would most regularly encounter, pay back time will likely fall within a four to six and a half year period of ownership. (Based upon $3055 hybrid price premium, $525 hybrid tax credit *ends 12/08*, 15,000 miles/year travel and gasoline @ $3.95/gallon).”

  23. Here in Japan, diesel fuel is considerably cheaper than gasoline. So owners of diesel vehicles get a double plus. However, Japanese consumers dislike diesel passenger cars primarily because of their “dirty” exhaust (the new clean diesels have made few inroads here), and also because of the higher purchase cost.

  24. The Civic Hybrid is most comparable in options to the Civic EX, at a little over a $3,000 premium. Here’s but one comparison with a few more miles than your example. Feel free to debunk.

    OK, the EX 5-spd manual is $3,900 less than the hybrid. Again at 12,000 miles/yr you need nearly 10 years to pay out the difference. The 5-spd auto cuts the difference down by $800. If you were buying the EX anyway and put on a lot of miles, maybe it would be worth it.

    For most people – probably not.

  25. OR how about the Camry LE 5-spd vs. the Camry Hybrid.

    How about Camry XLE V6 to the Camry Hybrid? Wow, the Hybrid is $2500 cheaper AND gets better MPG. There, I just proved hybrids cost less than non-hybrids, and anyone who buys a non-hybrid is a fool.

    That’s apples-to-oranges, you say? No more than your comparo. The link below shows Hybrid’s standard equipment list is actually closer to XLE V6 than LE 4cyl. At least I didn’t compare an auto to a manual!

    http://autos.yahoo.com/newcars/comparison/results.html?pagetitle=features&carid0=23872&carid1=22798&carid2=23843&compare=Compare+cars

    Compare apples to apples and you’ll get a hybrid premium of $1500-2000.

  26. “It would take 8 years to pay off the $10,000 premium of an electric system driving 40 miles a day and saving 8 cents per mile, Gott says, which is longer than most people want to own a car. “But people buy these things to make an environmental statement,” he says.”

    http://www.msnbc.msn.com/id/25104169/

    The article is about kits that turn cars into PHEV’s. The problem with the 8 yr. payback is that cars last more like 20 years. Wouldn’t the resale value of a PHEV be higher,even after 15 years?

  27. To the person that commented about the advantages if rationing occurs, consider this.

    If there is a scenario that requires rationing, the private user is last to get diesel, after;
    Agriculture
    Essential services (police/ambulance)
    Military
    Freight Haulage
    Railways
    Mineral Extraction (to keep the coal plants running)
    Essential infrastructure maintainance (grid maint + water distribution)

    Whereas almost none of the above use gasoline, so there will likely be far more to “spare” for consumer use.

    Particularly in Europe where many people drive diesel cars, one of the main reasons I like my gasoline car is cos if there is rationing the petrol user is likely to come out much better off than a diesel once the essential sectors take their claim.

    Andy

  28. Doggy – I’m guessing you own a Prius.

    I don’t think my comparisons are wrong. Toyota and Honda are making you take trim packages on their hybrid vehicles. If you want the hybrid, you have to buy other stuff you might not want.

    If your decide you want to own a Camry or a Civic EX then you can pick between the hybrid and conventional models. If you drive enough and own the car long enough the premium might pay for you. For most people (and for RR who thinks he will only drive 5,000 miles a year) it probably won’t.

    If your decision is to buy the most fuel efficient vehicle – regardless of the trim package, then I’m saying a hybrid doesn’t make sense for most people. You can find a comparable size car with good gas mileage for a lot less upfront cost – as much as $8-9K less.

    I would agree that the hybrid premium has to get down to $1,500-2,000 for it to be a no-brainer.

  29. The problem with the 8 yr. payback is that cars last more like 20 years. Wouldn’t the resale value of a PHEV be higher,even after 15 years?

    I think average car life is more like 12 years, but your point is valid. Many analyses only run 5 years or so and use the same or even LOWER resale value for the hybrids based on the idea the batteries will wear out or something. In the real world, of course, things are different. Try explaining to those people selling their used Priuses for more than they paid new how much money they’ve “lost”.

  30. Doggy – I’m guessing you own a Prius.

    With four kids? I drive a minivan.

    You are correct: someone who wants a stripper Camry Hybrid is out of luck. But so is someone who wants a XLE-V6 Camry Hybrid. Or a Camry Solara convertible hybrid. Toyota can only make so many Camry Hybrids; they aim at the middle of the market instead of the fringes. This will change over time as they add hybrid production.

    The hybrid premium for a mainstream Camry buyer who wants auto, alloys, traction control, etc. is $1500-2000. That’s the only comparison which matters. Attributing the cost of these features, which millions of people buy anyway, to the hybrid drivetrain is absurd. It’s like saying Fog Lights cost $7000 because you have to buy the $28k XLE-V6 to get them instead of the $21k LE-4cyl.

    By the way, my last link didn’t work. Try this one.

  31. Young people nowadays are more into rice burners than gas guzzlers. My son turned 15 yesterday. About six months ago,he came across his “dream car” on Craigslist. A ’94 Civic hatchback with VTEC engine that hadn’t been modified at all. He convinced us he needed at least 18 months to make his dream car fashionable,LOL. He saved enough working with me the last three years to pay cash,so we let him buy it. I had offered to give him my ’94 Dodge SRT truck with the Viper engine when he hit 16. It’s got the hood scoop,20 inch wheels,fire red paint job etc. etc. Not cool dad…

  32. Doggy – funny you should mention the Solara. That’s what my wife wants. My requirement is that it should get around 24 MPG or so. For a bit of irony, if Toyota had a hybrid Solara I would probably buy it! We’ve never owned a convertible. The attraction for us is the convertible, and mileage is a secondary, but important issue.

    I’d like her to drive the Volkswagon EOS. It does 28 MPG.

  33. Here is a picture of my new hybrid

    This electric assist bike was $350 at walmart, it is by far the cheapest e-bike you can buy. I still have to peddle, but I can do my 5 mile commute very quickly and without breaking a sweat. Considering that I would otherwise be driving a conversion van, this thing will pay for itself very quickly.

  34. The point of a hybrid is not just The Best Mileage In The World, but to be able to get better mileage in a decent car. You get 4 cyl economy in a car that drives like a V6 and has a nice equipment package.

    Want to hear a positive about a Prius? The air conditioning doesn’t run off the motor, so it doesn’t get hot and stale when sitting.

  35. I remember diesel fuel was always less expensive everywhere last year when I drove from New York to Florida. Why is it the case that diesel is likely to remain more expensive per gallon than gasoline?

  36. As far as maintenance is concerned, most hybrid components need no regular maintenance. Of course, you’ll have to change the oil in the gas engine every 5,000 to 10,000 miles, just as you would in a conventional car.

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