Green Update–>Gas Is Up; Diesel’s Up; Demand is Up

Our rosy, rebounding economy is still powering the American demand for gasoline, according to the American Petroleum Institute. February gas deliveries were up 4.2 percent over a year ago—a new record—and U.S. drivers were still buying, despite a near 40-cent boost in gas prices last month.

Yes, we know it hurts, and you’re probably looking at $4.00 gas this summer.

Others besides Big Oil aren’t so sanguine about the rebound. Nielsen Wire considers the budget impact of these price increases on typical households. It finds four scenarios in which increases in gas price from 10 cents to $2.00 would hit household budgets with anywhere from $10.50 to $210 per month.

Add in the Middle East uncertainties, the Japanese disruptions in supply, rising commodity prices, still-way-too-high unemployment, and the fact that household wages have not kept up with inflation—and the picture is hardly rosy.

One of the best sources for checking fuel prices is the U.S. Energy Information Administration’s Gasoline and Diesel Fuel Update, which gives regional and national data.

While both diesel and gas prices are approaching 2008 levels, diesel is finally coming closer to gas, and U.S. buyers are finally buying more diesel cars. Monthly diesel sales of new cars (from Audi, Mercedes, BMW, and Volkswagen—the only ones selling diesel in the U.S.) essentially doubled.

Volkswagen sold the most—over twice what their competitors sold—and Audi led in percentage of buyers choosing diesel (48 percent). In all, for 2010, 32 percent (77,877) of cars sold by these four German carmakers were diesels.

Maybe it’s the beginning of a trend, as people begin to recognize the benefits that diesel can provide: much better fuel economy, less greenhouse gas emission, more torque, and longer life.

Fortune contributor D.M. Levine wrote a good piece on the impact of rising oil prices and the other uncertainties as these things affect the development of EVs and hybrids. Despite the fact that such cars haven’t sold well yet, we are still in a transition stage, “and the days of the gas guzzling internal combustion engine are numbered.”

But it’s all a matter of timing, isn’t it? Fuel prices are just one element in a nasty mix of economic confusion, Mid-East madness, and the hazards of nature.

Will you curtail your driving if gas goes over $4.00?

—jgoods

Find Used Cars in Your Area at CarGurus

3 Comments

  1. @ jgoods
    Scary isn’t it?? I’ve been thinking the very same thing for about a month now. Maybe its the way you are presenting your stuff or maybe you’ve shifted your focus away from the environment to economics or maybe I have softened my position away from the free market lean I’ve always had. The Republican governors have done a lot to move me back to the left a bit. The do nothing coward on Pennsylvania Avenue tempers that move however. Whatever it is you don’t raise my hackles as much as you used to.

    Now if we can only get tgriffith back from the Dark Side!!

  2. @ panayoti
    What is happening here, man? You and I used to argue; now I find myself agreeing with you! Certainly with your first two paragraphs, which are exactly right, in my view, and of course they are a “political statement.”

    The interesting thing about diesel vs. gasoline is that their pump prices seem to be approaching parity, finally, which gives diesel an advantage it hasn’t had in years. That doesn’t mean diesels will ever catch up with gas engines in sales, but the diesel benefits I mentioned will have a better shot with some of the more enlightened buyers, as sales figures are showing. Cars like the Elantra are pushing competitive diesel-makers to improve, and that’s a good thing.

  3. No and that is a problem. You lay out all the requisite factors involved in our consumption of our addition and we Americans quietly yawn and roll over on our other side and continue to sleep through the most trying times in this country’s history. As a former teacher I am reminded of the attitudes of my young unconcerned minions about economic reality. I think far too many Americans are indifferent to economic realities because of the polarization of our political system. Their attitudes are that they can do nothing about it and they might as well not get involved in circumstances they cannot control. An uncaring nation leads to apathy and apathy leads to inaction and a lack of action leads our politicians to do anything they can to fatten their wallets and to enact policies which helps their political handlers at the expense of those who don’t care.

    I don’t mean this to be a political statement but until we as a people stand up and demand legitimate reform in our lack of a clear cut energy policy, we will continue to be rocked with news and questions of the topic you address. Then the whining will start and the idiots on the left and the right will proffer their requisite “solutions” and further polarize the country into more inaction. What a country!!

    Diesel is much like a hybrid. It provides all the attributes you mention but like the hybrid, you end up paying more at the pump to get their benefit. Like the hybrid, diesel is great if you buy only one car in ten or so years, a period long enough to get a “payback”. Since our manufacturers are starting to finally spend some dollars to invest in efficient gasoline engines, the gap between diesel and gasoline will tilt to the side of gasoline. The Elantra for instance is beaten only by the VW diesel and then only by a couple mpg and the cost differnce is pretty substantial. So the difference in 5 years between gasoline and diesel motors should tighten up a bit as gasoline motors will outsell the diesels by a significant factor. Since I am not a fan of sardine cans, I am planning on buying a new vehicle and will be looking for a gasoline version of the new Passat replacement. I am hopeful that many readers offer up their answers to you query.

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