Not too long ago the only person who would buy a diesel-powered car would be a farmer who didn’t mind the distinctive knocking noise that sounded like a piston was about to burst through the engine casing.
But, along the way, it became cool to own and drive diesel engines, some of which could even out-perform conventional petrol engine-powered vehicles.
Diesel has also been cheaper than petrol, at least in part because it has a lower fuel tax, R1,11 a litre compared with R1,27.
A couple of months back, driving past one of those service stations that advertises its prices on a large board on the street, I noticed that diesel was quite a bit more expensive than petrol. I thought that whoever had the job of putting up the prices had got the two mixed up.
But no, the Department of Minerals and Energy’s latest prices for Gauteng show that diesel is about 50c or 60c a litre more expensive than petrol, depending on the octane rating and sulphur content. In Gauteng, 95 octane unleaded sells for R8,91 a litre while low-sulphur diesel costs R9,43, according to the department’s website.
It is important to remember, though, that petrol is regulated at the pump, while diesel is not. Service station operators can charge any price they please.
You could be forgiven for thinking that the price differential has something to do with the electricity crisis, perhaps because Eskom’s diesel-powered peaking plants are chomping so much fuel that this is boosting prices. But you’d be wrong.
Eskom can chomp all the diesel it likes and this will not affect the basic fuel price, which is calculated from a basket of selected international prices.
The problem is that diesel internationally is in huge demand. Petrol prices in countries such as the United States have even being slipping in recent weeks and crude this weak was slightly lower, trading at $100 a barrel. But not diesel.
There have been go-slows by truckers who are muttering darkly about the need for strike action because diesel has for the first time broken through the $4-a-gallon threshold.
Petrol (or gasoline as they call it) is much cheaper, the national average being $3,26 a gallon last week compared to diesel’s $4,06. This works out to R6,39 a litre for petrol and R8,58 for diesel.
Diesel demand, my web research tells me, is being driven, as is most things, by rampant economic growth in China and India as well the drive to tighter fuel emission standards in Europe.
Reuters reported last week from Beijing that fuel stations on China’s east coast were rationing diesel “despite assurances from Beijing that its refiners will ensure supplies at unprofitable state-set prices”. One garage reportedly had a queue at least 1km-long.
In Guangzhou province, China’s manufacturing hub, said Reuters, diesel sales were rationed to $42,56 a tank, enough to fill up a family car but just a small portion of a truck tank.
From Mumbai, the Economic Times reported that diesel consumption was growing at 20% a month this year, growing twice as fast as the country’s gross domestic product.
Ashok Sinha, the MD of one refiner, the Bharat Petroleum Corporation, said diesel demand was being driven by a big increase in mining and quarrying, road construction as well as power production using diesel.
The acute shortage of power all over the country led to the extensive use of diesel to power generators and larger power plants, the Economic Times said.
In Europe, a massive switch to more efficient diesel cars is also putting upward pressure on demand. Diesel sales are up by 40% in Britain over the past decade, according to Reuters, citing the Energy Institute. Petrol sales fell by 17% during the same period.
Diesel is now used by 64% of motorists in the five major European economies (Britain, France, Germany, Italy and Spain), the report said, adding that a Swiss research institute had predicted that diesel will account for 80% of transport fuel sales in about 10 years.
South Africa consumes about 25-billion litres of fuel a year, of which about 40% or 10-billion litres is diesel.