These Diesel Prices Are Killing Me (but I’m still doing alright)!

Two years ago, I got rid of my ’94 Toyota Camry for a nice VW Jetta TDI to take advantage of the excellent fuel economy (and torque - 250 ft-lb, heh). With the exception of taking on car payments, it was a great decision. The average fuel economy in the Camry was 23 mpg. I average about 39¹ mpg now, not too shabby.

The problem now is that diesel prices have skyrocketed to just over $4 nationwide. Here in Austin, the price average around $3.99², and has been steady for a few weeks. If I got to certain Shell stations to get B20 or to EcoWise for B99, the price will be much higher. So am I still seeing a benefit?

So at $3.99/gal for diesel and 39 mpg I spend roughly 10 cents/mile on fuel. If I were driving the Camry I would be paying 14 cents/mile. At 20,000 miles/year, I would spend $2046 and $2,826 respectively. This translates to $779 in annual savings. Of course, these numbers are very rough since these aren’t average prices for the year, and specific to my cars.

The takeaway point is gas would have to drop an entire dollar to $2.35 or diesel would have to jump to $5.55 for my car to be uneconomical to drive compared to the old V6 Camry. Keep in mind that this is assuming gasoline and diesel costs are not coupled too tightly, which probably isn’t a good assumption. I would need to look at price trends and determine how closely the prices follow each other. Maybe next week.

So, okay, I’m still coming out ahead. But that doesn’t mean that my driving habits will stay the same. As Dr. Webber mentioned in lecture, it takes more than efficiency to decrease fuel consumption. It has to be coupled with an increase in fuel cost, and I think we’re seeing that now. While I’m still coming out ahead, the amount that I’m paying keeps increasing.

I might not lay off the turbo, but the concept of making an extra trip to the store or to a far away restaurant is less appealing with higher fuel costs.

¹Conservative estimate. It fluctuates from 36 to 42.
²Tarrytown Texaco, 4/2/08