With fuel prices currently in another stratosphere–especially in California–diesel vehicle owners may have noticed a disparity in prices, at outlets that sell same-brand fuel. Simple human nature (value seeking) attracts us to the cheaper deal.
However, as you pull up to the pump, do you ever think about what the reason for some of the cost differences for diesel might be, if it isn’t just flat-out price gouging? We recently noticed a near-seven-cent disparity between two Southern California Chevron outlets that are in close proximity to each other, and decided to investigate why.
Fuel costs $4.09 at the first location because it’s B20 biodiesel; an alternative fuel (that actually is about 80 percent standard diesel, along with a mix of vegetable oils, fat, etc. ). Less than five miles west, $4.15 is the price, because pure No. 2 (with only a small percentage of biodiesel) is the crude they’re pumping.
It’s not a matter of refining costs, as biodiesel and Number 2 are produced for roughly the same amount. Part of the savings comes via the Biodiesel Tax Credit, which credits fuel distributors $1.00 for every gallon of biodiesel produced with agricultural products and recycled oils. Basically, at the retail level, the Chevron in our first example photo shares the gain with fuel customers through its $4.09 price.
What are the main Ingredients of biodiesel?
Soybean oil is the main component of biodiesel refined in the U.S. Ingredients also include residual cooking oil, algae, animal fat, and canola. Again, there’s regular diesel in the blend, and in many cases, five percent (aka “B5” biodiesel), is the amount that’s in the more-expensive petroleum fuel.
- It’s a renewable-source fuel. As such, many of its contents can be grown, which lessens our dependence on other countries for oil.
- Reduces tailpipe emissions. According to data published by the Environmental Protection Agency (EPA), biodiesel emits 11 percent less carbon monoxide and 10 percent less particulate matter than No. 2 diesel.
- The U.S. government approves! Biodiesel powers our military rigs, as well as the work- and official vehicles in many municipal motor pools.
- Diesel engines can run on biodiesel without requiring any modifications.
- Biodiesel can improve fuel economy a bit, as well as acceleration.
- Regulated by the National Biodiesel Board to ensure quality and consistency for all blends.
- The other major concern is how fueling stations treat biodiesel compared to other fuels. Because it’s primarily made using vegetable-based products, it must be stored at the correct temperature. If it’s left for too long in a warm storage tank, it can grow mold. Conversely, if it is stored at temperatures that are too cold, it could thicken and become difficult to dispense.
- Biodiesel’s high lubricity can create deposits in fuel lines, which in turn clogs filters and can lead to problems caused by poor fuel delivery.
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