Overtaxed
Senior Member
I beg to differ. Pilot used to be my normal fill up station. Since they've left TSD, they've "lost" about 500 gallons of diesel fuel sales from me. And will continue to lose my ~1500 gallons/yr in purchases. They are losing something, no question about it.
You know, I was hiking today, and often, when I do that, my mind wanders. TSD was on my mind, because, where I filled up that day had a posted price of ~2.50 per gallon and the TSD price was ~1.50 per gallon. My savings on a fill up for the 450 was about 35 dollars, and when I saw it on the app, I thought to myself, "how in the h*ll is this happening". After that, I called my brother who uses heating oil and asked him what he paid on his last fill of the season (a few weeks ago), and it was about 2.25/gallon. Well, a few weeks ago, I filled my 100 gallon transfer tank for the first time with road diesel (green) for about 1.50/gallon.
The simple question here, how is this possible? HHO (home heating oil) is diesel fuel, dyed red, without road tax paid on it (which saves 30-60/c per gallon, depending on where you are). How is he paying MORE for heating oil than I am for fully taxed diesel fuel, and not by a little bit, by a LOT.
Making it simpler, TSD right now, in my area, is about 1/gallon savings. It's a little less than that, but let's just call it a dollar a gallon for the sake of discussion. Does that mean that the gas station makes >$1/gallon on every gallon of diesel they sell?! That's getting close to 100% markup, I thought fuel had "razor thin" margins, not marked up like a Gucci purse. Are they selling the fuel below cost to TSD? If so, why? Is there some futures buying/hedging the TSD is doing? I mean, silly, but if my station is buying diesel at 2.25 and selling it at 2.50, sounds like I could go into business buying from TSD at 1.50 and trucking it to FlyingJ, selling it for 2/gallon and making a good profit myself while leaving plenty of margin in it for FlyingJ.
I just don't get it. Fuel is a commodity, it's almost like selling dollar bills at 80c each, it just makes no sense, why would you sell it so cheap? I just do not understand it, I really thought the whole thing was BS until I read some reports and then tried it for myself, and now, instead of thinking it's BS, I just sit with my jaw slack as I see my settlement statements roll in that are close to 1/2 the posted price at the pump. Is the fuel business really that profitable?! Or are those 2.50 prices just for the "rubes" who don't know about EFS programs, where EFS is more the "thin margin" sale that I thought was the norm for all fuel?
It's just crazy, I look back on all the payback period calculations I did on my first diesel vehicle and not a single one of them looked good because the price of diesel was so much higher than gasoline. And every calc you see online basically says that too, but, it's not actually true. EFS brings the price of diesel to basically around the price of super gasoline right now and that totally changes the payback period for diesel in something like an BMW X5 (for example).
I just don't understand how they can do it, I really don't. Or, put another way, man have I wasted 1000's of dollars, probably 10,000's of dollars over the course of my life buying diesel fuel at the "rube" price. My brother would be better off filling his heating oil tank with road taxed diesel fuel (and not by a few pennies, by a LOT), how on earth does any of this make any sense? And, looking at this chart, the price my brother was getting for HHO was pretty much in line:
https://www.nyserda.ny.gov/Research...e-Heating-Oil/Average-Home-Heating-Oil-Prices
Around 2.50/gallon. When I can buy (and just did, today) fully road taxed diesel at 1.50/gallon? This makes no sense to me. How much profit is in that 2.50/gallon price? Before this, I would have thought maybe 20c/gallon. But, sounds like the real answer has to be close to 1.50/gallon in PROFIT (taking TSD price and subtracting out the road tax at around .50/gallon, no, it's not exactly .50/gallon, it's about .35/gallon in my area, just trying to keep the numbers round). It's just crazy making, and really turned what I thought I knew about the energy/fuel market right on it's head.
