You never had to worry much about the difference in price between petrol and diesel. They tracked together. But over the past 15 years, diesel has averaged five cents a litre more than petrol, ranging from two to 13 cents.
But now they have parted ways as the global market for energy has blown up. Diesel now costs 44 cents a litre more than petrol. Those driving petrol cars are enjoying a slight respite from high prices, and those driving diesel utes are in a world of pain.
How on earth has this happened? It is not about greedy local retailers, I’m afraid. The global price of diesel has shot up, as this chart shows.
The answer can’t be traced back to the oilfields of Qatar either. Oil can be turned into petrol or diesel. The issue instead seems to be about demand for refined products: machines use diesel — from Russian tanks to electric generators to the little bobcat clearing the ground in the vacant lot down the street.
In Australia, only a third of diesel demand is retail. The rest is bought wholesale and poured into diggers, tractors and mining equipment, especially in Western Australia.
We now sell twice as much diesel as petrol. In 2010 the two products sold in roughly equal volume.
Australia is hit particularly hard by the rise in the price of diesel because we do a lot of mining, but also because we’ve been doing something quite silly — expanding our fleet of diesel cars aggressively.
About a quarter of all vehicles on the road in Australia were diesels in 2021. But that share is growing as more than a third of new car sales are diesels. As this next chart shows, the big reason is our enthusiasm for big US-style utes. The Ford Ranger is a diesel, and so are most models among its mates the Hilux, the Navara, etc.
That means a lot of tradies are still feeling serious petrol pain. Don’t rule out more crazy interventions — the Australian political system is nothing if not responsive to the feelings of tradies. Interest rates will also hover higher for longer unless diesel falls.
In the US, the price of diesel has become a hot political issue for President Joe Biden, with pressure to intervene in the market. Of course, if he does and makes diesel cheaper in the US, this will only lift diesel prices higher for the rest of the world.
The only upside in all of this could be a faster transition to electric vehicles — see the electric blue line in the graph above? It is finally raising its head, and if diesel prices don’t come back down that could be the start of a new trend.
Diesel fuel is a less refined petroleum distillate than petrol, so it should always be cheaper to produce than petrol.
The massive increase in the price of diesel is about price gouging by the fossil fuel industry
i remember this being explained to me as a kid as to why diesel was cheaper than petrol
Lack of regulation in the vehicle market has led to the proliferation of diesel guzzling behemoths. There is little reason why this should be, apart from image and “our enthusiasm for big US-style utes”. I, for one, am quite happy to hear that their owners are “in a world of pain”.
so instead of retiring and traveling Australia towing a caravan a spending money in all those tourism spots and caravan parks that employ people I should spend days sitting at home instead
Nah! Most caravanners will free camp when they can, and are as tight as fishes’ arseholes. Travel in Oz by all means but stay in motels like the rest of us.
No way- Australia is a big country-‘free camp’ should mean in a tent!! Not in a $100,000 mobile home /trailer! What does pulling one of those do to fuel consumption???
I am not pulling a $100K caravan
thanks for profiling me without any evidence..what a rude little person you are.
Adults look at caravan parks that are full and realise what a dill you choose to be
Yes, diesel is needed by diggers, tractors and mining equipment. It is also needed by rural trucks, harvesters, fishing boats and all forms of primary industry. Remote consumers increasingly rely on diesel generators, decorated with a token solar panel or two. Ships need their equivalent of diesel, and aviation needs it as much as any other industry. We openly condemn coal and gas, but we go weak at the knees at any commitment to replacing fossil diesel.
Diesel and related fuels do not have to be made from fossil oil at all. Synthetic fuels can be made by hydrogenating recycled CO2. Yes, that would increase the price of fuel, but our leaders would rather send our money to Saudi Arabia. After all, if we dodge the issue long enough, we can leave it to the kiddies to pay to arrest the worsening mess.
Auckland Harbour have just put the worlds first electric tugboat (Sparky) into service, looks impressive.
As Vince says, an electric tugboat looks impressive. It can return each night to charge up again, which a 40 MW transpacific container ship cannot, so any long-range transport needs fuel. Batteries are fundamentally limited by their chemistry – only a small fraction of their component gets oxidised to provide energy and once oxidised has to be carried for the rest of the journey. On the other hand, a fuel-driven vehicle oxidises the entirety of the injected fuel and immediately dumps the oxidised component into the atmosphere. That is fine if the carbon had been previously been captured from the atmosphere.
South Australia’s “Big Battery” contains about 200 MWh, which could only power that container ship for five hours. A 20-day journey would require 800 MWd, which would require an extra deadweight of 96 Big Batteries. Out of the question, we must forget about batteries for storing energy. We must provide synfuel instead.
Seems odd not to mention that the diesel “…bought wholesale and poured into diggers, tractors and mining equipment…” attracts a tax rebate of up to 100% – in effect, no excise.
Not so for retail to the mug on the street.
I think the original idea of fuel tax was to pay for roads, so machines which don’t go on the road don’t have to pay it
Locally – the fuel excise has now been added to cost of diesel – it is now $2.30+ a litre
The increase is way higher than just adding the 22-25c a litre in fuel excise.
Diesel was selling below $2.00 a litre with the fuel excise reduction – again the fossil fuel oil corporation are price gouging and ripping off motorists
In Britain, all the Continental countries and most of the rest with which I’m familiar diesel is significantly cheaper.
Pity about the air quality, suspended particulates and putrid environments.
At one time – 80s? – european governments, inexplicably, pushed for the adoption of diesel, even more small personal vehicles.
When EV batteries begin to be replaced there’ll be another ‘oopsies, didn’t see that coming‘ problem with which society will have to deal, ie pay.
Not the manufacturers, purveyors nor related commercial interests – the usual MO/business model, privatise profits, socialise costs will continue.
Diesels are more fuel efficient than petrol engines and emit less CO2, which makes them better for the environment.
there are websites – type “diesel cleaner than petrol”
The mode of combustion, compression rather than ignition, means the less processed oil burns much less completely and emits 60% more NOx/NO2 than petrol engines(0-30%) of comparable size.
NO2 is extremely damaging to health as well as the environment – NO x in the air also contributes to the creation of ozone when it reacts with unburned hydrocarbons (fuel)
in the presence of sunlight. Diesel vehicles are estimated to be responsible for 45% of the emissions leading to ozone formation.
Diesel engines cause much more pollution of other by-products.
https://www.respire-asso.org/wp-content/uploads/2015/09/2015_09_Five_facts_about_diesel_FINAL.pdf
Yes, well, Transport & Environment “Europe’s leading clean transport campaign group” would say that wouldn’t they.
You can sit here and argue the pro’s and con’s of petrol vs diesel forever, and provide convincing evidence either way that you are correct. But there is no escaping the simple fact that both are damaging and need to be removed from the world as quickly and as much as possible.
My understanding was that diesel take up started in the 80’s-90’s in Europe but was pushed hard in the mid 2000’s on because there was far more room for development and emissions reduction in that area. Petrol had been researched as much as possible. IN a previously unthinkable turn of events diesel cars came to dominate the Le Mans 24 Hr race! Before hybrids took over of course. The Nitrogen oxides problem is a particular issue with diesels. I guess the thinking was that could be reduced and I think that’s what the VW emission scandal thing was all about, they were lying about their emissions.
The problem with diesel price though has nothing to do with people driving diesel cars, and everything to do with the fact that ALL of our transport of goods, and all heavy vehicles, use diesel power – trucks, and diesel electric ships & trains. So the price of diesel directly affects the price of almost every item you buy. If diesel goes up so must everything else.
Good news is that you can get electric trucks now! 🙂
“ Good news is that you can get electric trucks now! ?”
If you’re one of the lucky minority of Australians who can afford an electric vehicle at all.
Interestingly, the majority of our truck fleet is well over 30 years old. The transport industry doesn’t even invest in cleaner modern diesel, so I can’t see it investing in electric vehicles, can you? Why would it? There are no laws to force it to do better. Indeed, taxpayers subsidise it to be exactly as filthy and destructive as it is.
I walked last week past a local Tesla charging station with 6 vehicles hooked up to the sockets.
There was a technician there from Tesla working on one of their EVs. The technician’s vehicle was a Toyota HiLux.
Except that requires government to enforce emissions standards. In Australia the diesel engines are filthy and emit more pollution. That is no doubt why the article says
Manufacturers can dump their older designs made to lower standards on Australia although they would be illegal in most of the rest of the developed world.
Most diesel passenger vehicles meet Euro 5 and 6 standards these days.
Yes, but 70 percent of diesel isn’t used here in road transport anyway. And I doubt that the Hi Luxes, Navaras, Rangers etc meet those standards, as many of them are built in Asia for Aussies, not Europeans…
Actually you will find that the engine and emissions systems for diesel passenger systems that are made in Asia do actually meet Euro 5 or 6. Euro 5 has been required in Australia for over 10 years.
Ford Ranger is Euro 5, Hilux is Euro 5, Navarra is Euro 5 etc etc.
The Australian market is so small that the only concession is right hand drive. Everything else is to the prevailing global standards. Virtually nothing is “made for Australia” (apart from some suspension tuning for our shyte roads).
Lucky we are not left hand drive as we would happily accept redundant IC vehicles form the EU…..
No engine is efficient when its hauling around an overweight technological relic with the aerodynamics of a brick plus idiot add-ons like four wheel drive (so essential for suburban Sydney).
And its not just tradies: the parents of my daughter’s school seem to be running a daily competition to own the biggest and stupidest car.
Speaking as the owner of one of those big and stupid cars, I can tell you it certainly was about competition- competition for visibility over all those bloody big utes. I went from my adored little Honda Jazz to a mid size SUV, purely because I didn’t feel safe not being able to see over the vehicle in front, behind or beside me anymore, Charles- not because I wanted to, but because I carry children, elderly folk and people with disability.
I have driven small fuel efficient 4 cylinder cars my whole driving life. After finally getting fed up with being constantly tailgated by these “folk hero tradies” in a twincab ute and an overly aggressive bull bar, I crossed to the darkside and purchased an Audi Q7 and am no longer bothered by such yobbos.
Now if you’d said “RS Q7” I would have been really impressed! Safe, go hard and handle…unlike the average ute!
Yep Vince. I see them around 3 – 4 on the M1 leaving Sydney. It’s a race for them to get back up the coast in under an hour so they can have “family time” at the pub or on a surfboard.
Sorry Kathy, from my little Skoda I know how you feel.
No-one was suggesting a mid-size SUV (which I own one of, too) was a ‘big and stupid car’. But the number of big utes used as Mum’s taxis is frightening. Not sure whether Mum and Dad still get a $5k rebate from the ATO for buying a ute as a ‘work vehicle’ but that policy was (still is?) a major reason for people to buy the bloody things even when they really don’t need them.
“No-one was suggesting a mid-size SUV (which I own one of, too) was a ‘big and stupid car’… “
I’m suggesting a mid-sized SUV is a stupid car – because it is, when a normal mid-sized wagon will do everything your SUV will, and do it more efficiently, more safely and less expensively.
They buy them because they do double duty.
That rebate still exists. Hilux was the biggest selling car gain last year. I love my small car!
This is the elephant in the room (or on the road) – we are buying and driving vehicles which are manifestly unsuited not just to our general driving conditions but also to the times. A family car today is a large diesel 4wd SUV. But a mid-sized conventional wagon will do everything the tank SUV will (except tow a three-tonne caravan) – and it will do it better. Much lower aero footprint for an old-school wagon means it’s much more fuel efficient, and without a truck chassis and additional 4wd mechanicals it’s also quite a bit lighter – and often also roomier inside (because the cabin dimensions aren’t compromised by 4wd running gear under the floor). With proper car-type suspensions and a sensible (lower) ride height, a normal wagon is not only nicer to drive but less prone to rollover in a crash. And as we transition to electric cars, the stupidity of SUVs (and 4wd dual-cab utes) will be even more pronounced: we’ll be congratulating ourselves on how ‘green’ we’re being driving around in 2.5-tonne (or even 3-tonne) electric SUV tanks when in reality we could/should be driving smaller, much more efficient conventional family wagons (ie: actual ‘cars’) that weigh at least a tonne less and do everything better on the road than a big SUV.
The Anglosphere has done little, but the EU has been active, from Euractiv, 9 June 2022:
‘EU Parliament passes ban on new petrol, diesel cars by 2035’.