Diesel is getting more expensive than petrol?!!

In the last issue, I talked about diesel engines but this time it is about diesel itself. When we drive past gas stations in Japan, we used to see diesel sold JPY10～JPY20/L cheaper than petrol. But now a big change is happening in the prices.

“Petrol: JPY97/L, Diesel: JPY98/L”: while driving in the Tokyo area we have started seeing signs like this since the end of last year. It was usual that diesel was cheaper than petrol per litre but now this is not the case any longer and this is a headache for diesel car users.

It was around last summer in the Northern Hemisphere when the situation changed. According to the Oil Information Centre, there used to be JPY20～JPY25 yen difference between the prices of petrol and diesel per litre but since September last year the difference has been getting smaller & smaller and at the end of last year it was only JPY4. This information from the Centre is based on average prices, so depending on gas stations, some were selling petrol and diesel at same prices or some were selling petrol cheaper than diesel.

However, this “cheap petrol & expensive diesel” tendency seems to be happening worldwide. In Europe where a large number of people use diesel cars anyway, more and more people have switched to diesel cars after last year’s high petrol prices. This is because diesel is 20～30% more effective in mileage, and the demand for diesel got higher relatively. As a result, the prices of petrol and diesel swapped places in many countries. According to AA, a traffic information company in the UK, at last December, in 10 countries out of 18, the price of diesel was higher than that of petrol.

In Japan, thinking about the difference in the tax rates, it seems a crazy phenomenon. The tax rate on petrol is JPY53.8 per litre compared to the light oil delivery tax of JPY32.10 and the difference is JPY21.70. At the wholesale Spot Market in Japan diesel is sold at JPY40 before tax whereas petrol at JPY34. Based on this, diesel should be sold about JPY15 per litre cheaper than petrol.

The reason lies on the escalation of petrol prices. A lot of gas station owners say the same thing: “We did not have any choice but to drop petrol prices because of the large decrease in its sales”. In the middle of a sudden drop in the demand, they are trying to attract drivers by dropping petrol prices. Unfortunately it is only in petrol prices where competition exists: at an average gas station, the volume of diesel sales takes up only a few percent. Even if they drop diesel prices, they cannot attract many customers, so they have to exclude diesel from the price war.

Most logistic companies who use large amount of diesel have their own supply or are using petrol cards, they can purchase diesel at lower prices. So, non-commercial drivers who use diesel have to pay a high price because they are small in number.

Checking carefully, you might find some gas stations who sell diesel JPY10 cheaper than petrol, faithfully following the difference in the original prices but they are the minority. The business of gas stations is a hard one in which culling out and closing down happens very often. The situation could change dramatically for a long time to come.


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(Editor)
JPC TRADE CO.,LTD.
3B YS-Building, 1-2-2 Botan, Koto-ku, Tokyo, Japan
Japan Used Motor Vehicle Exporters Association (JUMVEA)
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Diesel Engines: are they really bad for the environment?

That thick black smoke coming from the heavy truck in front of me: aren’t diesel exhaust fumes bad for the environment?

Speaking of exhaust fumes, thanks to the highly publicized event of Shintaro Ishihara, Governor of Tokyo, when he held up a bottle of diesel soot before cameras and reporters, “Diesel engines” have a negative image in Japan. But in Europe, half of new vehicles produced have diesel engines. Don’t you wonder why?

Actually, the development of clean diesel engines is making striking progress and nowadays there are less and less vehicles which produce black smoke. Diesel engines are more economical than petrol ones and emit less CO2 which is required to be reduced at the Kyoto conference. On the other hand, compared to petrol engines there was an issue of more oxides of nitrogen and particulate substance that can cause acid rain. However, this time, Honda has developed a new diesel engine with low emissions of oxides of nitrogen, at the same level as petrol ones. If this is installed in a car, diesel engines will be far better for the environment than petrol engines.

At the moment, it is only old type diesel vehicles which are the subject of regulation in the Tokyo area. Diesel engines, which were supposed to be bad for the environment, are evolving gradually, aren’t they? But I heard that in the EU emission control is getting tighter and now the USA & Japan will follow this and tighten emission control on diesel engines in the near future. Along with this movement, many car manufacturers are now using a function called “Turbo chargers” to soup up car engines. How do they work?

Turbo chargers improve heat efficiency by raising combustion efficiency, using energy from emitted gas which used to be just waste. Used especially on motorways at steady engine revs, it improves the efficiency even more. In Europe, where more and more diesel vehicles with low CO2 emission are produced, people care not only about the environment but the efficiency of diesel engines using turbo chargers.

On top of that, there is an engine called “the Stirling engine” which has now captured attention. However, this is not a new type of engine but was developed 2 centuries ago. Have you heard about it? What kind of an engine is it?

The structure is quite simple: by heating and cooling a gas at different temperatures, it is an external-combustion engine which gets power by inflating and deflating the gas inside (petrol and diesel engines are internal-combustion types). Because we can re-use waste energy effectively, this engine has now come under the spotlight again all over the world. For example, a venture capitalist and a marine company jointly started development of a Stirling engine for marine vessels in Tokyo Bay. One of the developers said, “Until now, gas emission from boats and ships at berth at Tokyo Bay was the biggest cause of air pollution. So if they can use the waste heat of the emissions to make power even just while they are there, we can get rid of a large portion of the air pollution”.

It does not sound like something they can use straight away and they will have to spend more time in developing it to improve the engine’s performance. As for diesel engines, checking old technology can be the first step towards an “Eco-friendly” society.


★ Japanese used car stock : http://jpctrade.com/stock/index.html
★ JPCTRADE Home page : http://jpctrade.com/
★ JPCTRADE Blog : http://jpctrade.blogspot.com/

(Editor)
JPC TRADE CO.,LTD.
3B YS-Building, 1-2-2 Botan, Koto-ku, Tokyo, Japan
Japan Used Motor Vehicle Exporters Association (JUMVEA)
TEL : +81-3-5245-7731
FAX : +81-3-3643-4955