Diesel is still in forecourt favour despite the rising prices, writes Donal Byrne.
DIESEL CARS have always had their detractors, mostly because of a reputation for being noisy, smoky and lacking in the performance finesse their petrol equivalents were capable of, but their supporters were always sure of one thing: their motoring costs were a lot cheaper. There have, of course, been major improvements in diesel technology with some diesel engines delivering all of the qualities - and more - of petrol units. Diesel is more acceptable now than it ever was in the past. A diesel race car has won Le Mans and Audi is preparing a diesel supercar. It's day has come.
Now, with the new car taxation regime being introduced in July, Irish buyers who never thought of buying a diesel car before are starting to consider one because of the lower CO2 emission levels, and consequent lower tax and running costs.
However, some may think that just as the diesel ship has come in, it has been hijacked by those profiteering oil tycoons. Where once it was cheaper, diesel has become appreciably more expensive than petrol. Yesterday's AA report showed a litre of diesel is now on average four cents more expensive than petrol at €1.246 per litre.
Whatever about the political and international machinations that are causing these recent fuel price hikes, some car buyers are now asking if diesel could reach a point where its costs advantage in comparison to petrol could be completely eroded?
In a presentation earlier this month to the Oireachtas Committee on Energy, Communications and Natural resources, the AA's public affairs manager, Conor Faughnan, had some reassuring news for committee members anxious to allay the fears of constituents - particularly rural ones - about spiralling diesel prices.
Oil producers need to predict demand in advance, and much American production was directed towards gasoline over the winter period. Demand, however, did not match predictions and now there is a surplus of petrol on the market and a corresponding shortage of diesel.
The conspiracy theorists thought that just as diesel was becoming more popular that the oil companies were capitalising on that interest, said Faughnan. "The truth is a little different, and we expect things to improve quite a bit by summer when the imbalance will be lifted by seasonal production."
Whatever about price fluctuations, the popularity of diesel is expected to increase significantly, particularly in the area of company fleets.
"The split in our fleet is 58.6 per cent diesel and 40.5 per cent petrol, with the balance being made up of hybrid and bio-fuel," says David Wilkinson, sales director of Merrion Fleet in Dublin.
The popularity of diesel makes perfect business sense, he says. "Diesel cars have improved enormously. The residual values are now much better, companies are getting VAT rebates of 21 per cent on the diesel they use in their cars, the fuel consumption itself is much better than petrol, and the people driving the cars are happier that price reductions for the diesel cars that are coming will reduce their benefit-in-kind exposure.
"On whole life cost analysis, the benefits are very significant. The company reduces costs and it also gets a greener profile because of the lower CO2 emission," says Wilkinson.
Last year petrol sales accounted for nearly 72 per cent of all sales in this country and diesel sales accounted for 27.41 per cent. While the advantages of diesel are obvious for fleets and high mileage customers, there are still valid questions about its value for private users.
Those with small annual mileage need to think about the price differential between a diesel and an equivalent petrol model. So far, only BMW has published its post-July tax change prices.
Car companies charge more for diesel models, citing higher production costs because of heavier components and investment in new diesel technology. These higher prices may negate any benefits accrued on the back of lower CO2 emissions.
As for the running costs, it's always worth doing some of the sums yourself. The first thing to do is to calculate your average annual mileage.
Then, using the fuel economy figures offered by the companies, work out their average consumption over a year, comparing a petrol engine and an equivalent diesel one. Obviously these fuel figures are "industry standard", but roughly reflect the difference between cars rather than the realistic consumption.
Once you factor in the price, you will see if any potential savings are possible from opting for diesel. Take, for example a 2-litre Passat, diesel and petrol. The diesel has an official fuel figure of 5.8 L/100km, while the petrol has a figure of 8.1 L/100km. So, for someone doing 10,000 miles a year - and taking the average prices from the AA yesterday (€1,207 for petrol; €1.246 for diesel) - the fuel bill for petrol would be €978 a year, compared to €635 for diesel.
Then factor in the different CO2 figures - 193g/km for petrol and 153g/km for diesel - and you see that where the annual road tax after July 1st for the petrol model is €600 while the diesel is only €290.
In summary, you could save up to €700 a year by opting for diesel, even with the price rises.
There are caveats, of course. For a start we have to be wary of car firms not passing on the full tax savings on the new car prices to buyers after July. We also have to be wary of just how high diesel prices reach.
Yet for all that, while some petrol fans will never be convinced, diesel is set for a major sales boost here.