Department of Energy Projects Lower Diesel Prices in 2014, 2015
Lower Prices Could Have Major Impact on Future Model Development
Diesel fuel's persistently higher price premium relative to unleaded has been a big barrier to increased new diesel model development for manufacturers, as well as being a purchase factor obstacle to some consumers considering diesels. But according to the latest Department of Energy Short-Term Energy Outlook forecast, the average cost for diesel fuel is projected to decline over the next two years, from an average of $3.92 a gallon in 2013 to $3.83 a gallon in 2014 and $3.73 in 2015.
The average price of a gallon of unleaded is expected to remain lower than diesel, but the incremental price drops for unleaded are not as dramatic. Depending on the specific model, the diesel powertrain option price can range from $2000 to more than $8000, making the payback period a long one for those that don't put a lot of miles on their vehicles. However, this projected price drop will likely make diesel seem a more viable option compared with natural gas, which is significantly cheaper on a gallon-equivalent basis, but is much less efficient from a consumption standpoint. Most CNG conversions on pickups cost between $6000 and $11,000, in a similar price range to a diesel option.
Although growing, the CNG transportation fueling infrastructure is still miniscule compared with the availability of diesel, causing many trucking fleets to stick with the tried-and-true fuel, despite the added inconvenience of urea selective-reduction catalyst and pollution control systems.
This forecast could also influence future product decisions in regard to lighter-duty diesels, with both General Motors and Ford reportedly considering offering diesel options in their light-duty trucks and full-size SUVs.