Mercedes-Benz has accused profiteering oil companies of ripping off diesel buyers and fears such action may kill the U.S. diesel passenger car market in its infancy. While oil prices have hit new highs, the pump price of diesel has surged to be more than a dollar a gallon higher than gasoline in some U.S. states, even though it is cheaper and less energy intensive to produce.
And Mercedes-Benz, which introduced its E320 BlueTEC diesel passenger car into the U.S. in 2006, is fighting back, with Daimler board member, Dr Thomas Weber, insisting there was no demand-driven reason for diesel prices to be so high.
“We knew this surge was coming in the U.S.,” Dr Weber, who heads up the Mercedes-Benz Research and Development division, told Leftlane.
“I believe there is definitely optimization of earnings by oil companies to take advantage of the higher usage of diesel today. There is not another plausible or economic explanation.”
While diesel sales are up in Europe, the economic downturn has lowered volumes in the U.S., where it is primarily a heavy transport fuel.
Even so, the U.S. Government’s Energy Information Administration reveals that diesel users have suffered more than double the gas price rises in the last year. Once cheaper, diesel is now significantly more expensive than gas everywhere in the United States.
The EIA’s data shows that while gas costs 443 cents a gallon in California, diesel there costs 499.2 cents and, in a nationwide trend, it is 72 cents more expensive on the East Coast and 63 cents more expensive in the Mid West.
While gasoline has risen 113 cents a gallon in California in the last 12 months, diesel has surged by 199.5 cents in the same period and its pump price surge has outstripped gasoline by 95.7 cents on the East Coast and 95.3 cents in the Mid West.
“The most important driver is a huge trend in diesel use in Europe, but that doesn’t explain it,” Dr Weber insisted.
“There are limitations on capacity on the refining sites, but that’s not it, either, really.
“Diesel production costs are less than the gasoline production costs so the only idea you can find is that these companies are in the business of making a profit, so that is what they do now.”
The EIA’s pump price breakdowns seem to confirm Mercedes-Benz’s allegations. While the cost of the basic crude oil accounts for 73 percent of the pump price of gasoline, it only accounts for 61 percent of the diesel price.
Instead, the EIA figures show oil companies are slugging diesel buyers by more than double diesel’s refining costs compared to gasoline. Only 10 percent of the gasoline price is in refining, while that figure leaps to 21 percent for diesel.
Nevertheless, Dr Weber predicted the massive gap between gasoline and diesel prices in the U.S., Australia and Europe would soon come to an end and, even in the meantime, they would not affect Daimler’s upcoming plans to hit the U.S. market in force with its diesel engines.
“For the customer, if they experience the advantages of diesel, they will stay with diesel anyway,” he insisted.
“The technology is 20 to 30 percent more efficient than gasoline and has more torque at lower rpm and that’s what most buyers actually use.”
Benz will launch BlueTEC diesel versions of its R-, GL and ML-class SUVs in October after receiving 50-state registration approval for the technology in March this year.
Words by Michael Taylor.



06/16, 10:41 AM
posted by:
trooper1
Even with deisel costing more than gas, its still much cheaper when you compare miles/gallon. While in Germay I drove the new bluetech benze diesel and its better than most V8 cars I’ve driven. Very quiet, 0-60 in 6 seconds flat, 155mph (governed) and I was averaging 40mpg on the highway with the AC on. What gas V8 car can do that??
06/16, 10:50 AM
posted by:
HemiRoadRunner
Fuel prices are a crock of $H!T. These oil exec’s need to be thrown out in the street and be beaten with bricks, rocks, bottles, anything. We should all get together while they’re out on their multi-million dollar yachts and pillage them like a bunch of pirates.
06/16, 10:53 AM
posted by:
Htay9500
oil execs are just greedy.
06/16, 10:57 AM
posted by:
xyunya
For Germans crying of world conspiracy is really calling kettle black. Diesel prices are skyrocketing in US, cause there is of lack of capacity to manufacture diesel. Actually there is lack of capacity to manufacture gasoline as well, but US can import excess gasoline from European refineries. Europeans will not sell diesel into US, because local demand is huge: 70+% of European cars are burning diesel. Actually same trend is happening in Asia.
06/16, 10:58 AM
posted by:
cookie4me
Oil industry profits on revenue are only 8%. The standard profit margin US companies shoot for is 15%. I don’t think they are greedy, I think they are the scapegoat. Speculation in the commodities market is the real reason for high prices. As for the difference in diesel vs gasoline, there are a lot of reasons why the prices don’t track each other. Diesel isn’t as well distributed as gasoline in the US so I’m sure that has something to do with it.
06/16, 11:03 AM
posted by:
HemiRoadRunner
I’m SURE they’re only making 8%. It’s kind of easy to show 8% profit when the U.S. gionvernment has it’s hands in your pocket’s. ALL of their machinery is paid for, they are making RECORD profits on the same supply they’ve had for the last 5 years. The auto industry is lucky to make 3-5% profit. I agree specualtion is a large part of it. Exxon gives some old mofo 400 MILLION for his retirement on top of his pension PLUS a private jet, 8% my @$$.
06/16, 11:18 AM
posted by:
johnnycanuck
Diesel has another competitor as well: jet fuel. It would be interesting to know what the production capacity ratio is between the two.
06/16, 11:40 AM
posted by:
Z06ified
I’m surprised politicians haven’t brought this up more in the U.S. Diesel prices affect a whole lot more than Mercedes’ diesel vehicle sales – they affect just about every thing we buy, as just about everything we purchase is shipped via diesel truck, and harvested with diesel equipment.
06/16, 11:49 AM
posted by:
kitko
Interisting – Diesel is more expensive than petrol in most of European countries, the difference is anything between 5-15 percent. Also, diesel cars are generaly 10-20 percent more expensive than the same models/trim level models with a petrol engine (diesel Mini cost 30 percent more than the same car with a petrol engine).
But I never heard Daimler execs complaining about higher diesel prices in Europe and surely not about largely unjustified price differences.
The ratio diesel – petrol is not 70 + 30 in all Europe. At the end of the day, diesel only makes sense when you intend to drive long mileage in over a short period of time. Or when diesel pricing and car prices reach the magic equilibrium, such as in France with the highest petrol-diesel cars ratio and cheap diesel.
BTW, I just checked out the price of diesel,
Britain – 2.70 dollars a liter of diesel – that’s a liter, not a gallon
Slovakia – 2.30
France – 2.50 – diesel is a few cents cheaper than petrol
06/16, 11:55 AM
posted by:
mayer_ray_nagin
No way – oil companies are conspiring to rip us off????
.
I’m no particular fan of Mercedes but they are right on the nose with this one. Oil companies are nipping a higher mpg alternative in the bud. The Volt can’t come fast enough.
06/16, 11:55 AM
posted by:
xyunya
Politicos did grill oil execs, but their profit margins are not all that huge. Of course, execs salaries and perks are berried in P&L statements and come as operating expenses. The industry is actually smart: their execs don’t make astronomical salaries, like auto execs make, and senate and congress can’t even rape them over excesses. After all, our political leaders are lawyers in their majority and most of those are prosecutors. They would know how to get dirt out. Nothing came up so far. It is just fact of life that Russian KGB cum oil barons and Saudi princess along with Venezuela would be dictator control a lot of oil production and current supply does not meet demand. At this point opening spigot is not in anyone’s interest on producing side. I can see their point: why sell at $130/barrel when you can sell at $150? Who wants to make themselves poorer?
Another problem is manufacturing capacity in US. If we could manufacture diesel in sufficient quantity cost would go down. It’s just not available not because of lack of raw material, but because of production capacity in US.
06/16, 12:48 PM
posted by:
1c3d0g
HemiRoadRunner: amen! These f*cking greedy pigs are jacking up Diesel prices on purpose. Something has got to be done to dismantle these oil cartels…they’re by far the WORST!
06/16, 1:03 PM
posted by:
Blakkarr
I am not surprised at that kind of a assertion.
But I can’t help but feel that automakers need to take their destiny in their own hands.
Investing more in alternative power trains, Hybrids, hydrogen, alternative engine designs, this hydrogen booster thingie and so on. Also, working hard with smaller players to develop alternative fuels like Cellulosic ethanol (Stop feeding cars our food), “Algae-oil” (suddenly we are making our own light sweet crude for fuel), cheap safe hydrogen, and more.
These car companies either have no balls, no brains, or are just lazy not to seek to make better product because that is what their customers are demanding. If they keep making excuses they are going to be shut out by a handful of companies that will make the cars we want and need.
06/16, 1:33 PM
posted by:
jumpoffit
hell i saw on the news over the weekend that a lot of corn crop was damaged with the storms here in the US, and now we are going to have a shortage in corn supply? not sure if anyone else saw this- so if we did end up having a corn crops damaged does that mean E85 rises in price as well?
06/16, 1:36 PM
posted by:
HemiRoadRunner
The point is oil is a commodity far to valuable not to be regulated. We need oil as much as we need food, cloths, shelter etc. Because without it we can’r obtain the rest of what we need, not except an insanely small number of us. There haven’t been ANY NEW REFINERIES BUILT, BUT somehow they can keep up with “demand” when they say how much demand has grown in the last 3-5 years, but they’re pumping out the same amount of oil? These guys make 8% profit in the books that they are allowed to screw with weeks before showing them to congress, who are doing nothing but stuffing their pockets with Big Oil cash. Come one, most of congress makes anywhere from 70-100K a year, most, how do they live such a lavish lifestyle? I’m not saying we shouldn’t look for alternate fuels, but don’t screw the people just to do so. The oil companies are making RECORD profits, but don’t seem to have record expenses. They just keep hiding the blame because they know sooner or later we have to eat, sleep or go back to work and we forget about being pissed at gas prices for a little while, all the time they just think of the next thing to blame it on.
06/16, 1:39 PM
posted by:
Jon Luc
This is news? They’ve always tried to squash the diesel. Just think of what happened to Mr.Diesel. Coincidence? No.
06/16, 3:06 PM
posted by:
peter g
Probably true. Can’t see why, though
06/16, 3:38 PM
posted by:
inline6
Not only that, but two years ago, Congress passed diesel emissions regulations in the US that were about 50 TIMES more stringent than those in Europe.
This is why most automakers have pulled their diesels to re-engineer them to meet the standards. And that re-engineering makes the powertrains more expensive to manufacture, more complex to build and repair, and reduces the fuel economy of the engines significantly.
Wouldn’t surprise me if some funny business wasn’t going on.
06/16, 4:48 PM
posted by:
A4
it has a huge amount to do with china stockpiling diesel fuel for the olympic games and such, ****ing commies
06/16, 5:04 PM
posted by:
Jordan
for once, hemiroadrunner, i agree with you.
06/16, 5:36 PM
posted by:
DeansterTJ
“We should all get together while they’re out on their multi-million dollar yachts and pillage them like a bunch of pirates.”
- Hemiroadrunner
HRR, the only pirate you’ll ever be is a butt pirate. Go ‘pillage’ some gay village anus in a dark dirty alley. It’s more your style you fag.
06/16, 6:00 PM
posted by:
NoNameDenton1
Yes Mercedes, eveything is a conspiracy, gonna send corporate photographers to see if the USA really really has captured aliens at Area 51?
06/16, 6:01 PM
posted by:
jayjc08
I’m happy to see people really taking a stand against big oil. You can argue that there isn’t much we can do about it, but leverage and publicity is key in this. Trying to preserve a clean image in the middle of a war, record high prices and businesses dying out because of oil shouldn’t be made easy for Big Oil.
06/16, 7:13 PM
posted by:
DrFill
You wanna solve this problem.
One word
OBAMA!
Gore has now endorsed him.
These are the only two politicians talking about taking down Big Oil! Who even think about caring about the environment!
McCain is in Big Oil’s pocket (and many others)
He’s First in line!
Make the smart move.
For those who don’t know.
Now you know.
Be smart!
DrFill
06/16, 8:15 PM
posted by:
NoNameDenton1
DrFrill, keep the politics to yourself.
06/16, 9:44 PM
posted by:
jayjc08
What’s Obama got in the hat for us then? And where has he talked about taking down big oil…..
06/16, 9:45 PM
posted by:
Impulsive
‘DrFool’, you’re as stupid as most who have posted above, excluding yours truly, the teacher … go visit the links, dummies, you’ll see the root of the problem.
06/16, 9:45 PM
posted by:
NoNameDenton1
At least McCain wants to allow us to do off shore driling, heck the Chinese are doing it off the coast of Florida.
06/17, 6:54 AM
posted by:
fuzz40
I hate rising gas/diesel prices as much as everyone else. But oil companies are there to make profit, that is the point of a business after all. It is not there fault that no one has developed a cheaper means of transpotation. Now if the oil companies are conspiring to keep oil prices higher, then the government needs to step in and bring the price down.
So instead of complaining about rising fuel costs, we should be complaning about the lack of options. I don’t mean E85, hybrids, or electric cars either because I don’t believe those are the answer, they are just a quick fix.
06/17, 12:35 PM
posted by:
Need4SSpeed
“…heck the Chinese are doing it off the coast of Florida.”
SAY WHAT????
06/17, 1:19 PM
posted by:
The Stig
And Mercedes isn’t profiteering and ripping off customers? Case in point – the 100 or so 2007 E320 CDI Bluetecs available in California are “lease only” (with mandatory return) at a rate 2x higher than the equivalent E350 gas model. Diesel prices are reflective of overall demand, somewhat constrained refining capacity as well as the introduction of ULSD, which is more expensive to produce.
06/18, 4:44 AM
posted by:
NoNameDenton1
Need4SSpeed, You did not know that? The Chinese do off shore drilling all the time, currently one of their platforms is off the coast of Florida.