Drop in diesel prices changes running costs equation

Fuel prices are a constant source of angst for motorists. But a recent trend suggests it may be time to re-evaluate our assumptions about vehicle running costs.

Hybrid or diesel? Hyundai’s Palisade offers both. Picture: Supplied.

Drivers who paid extra for a diesel vehicle were gnashing their teeth at the end of last year, as diesel prices skyrocketed.

In 2021, national diesel prices were actually lower than petrol. Add to that the fact that diesel engines are far more economical than petrol and owners were well in front.

Then came the war in Ukraine, supply issues and other inflationary pressures, which turned the tables markedly.

In November last year, diesel was roughly $2.35 a litre, while petrol was only $2.00 a litre. That all but wiped out the efficiency advantages offered by diesel.

A recent drop in the price of diesel has made the fuel more attractive, especially for larger vehicles. Picture: NCA NewsWire/Flavio Brancaleone

More recently, the petrol price advantage has narrowed to roughly 20c a litre, tipping the scales back in favour of diesel as far as running costs go.

Most of the big brands offer the choice of diesel or petrol for their SUVs and most buyers of large SUVs prefer diesel models for their lower running costs, longer driving range and towing ability.

So how do the sums add up?

If you use Hyundai’s Palisade for comparison purposes, the benefits of diesel are pretty clear cut.

The cheapest V6 petrol version of the Palisade range, at roughly $72,000, is about $4500 cheaper than its diesel equivalent. That’s a decent price premium, but the diesel model also adds all-wheel-drive, which delivers better traction on slippery surfaces.

The diesel is also superior for anyone who tows. It has more torque at lower revs, which means it’s more effective – and efficient – when hauling a heavy load.

The Hyundai Palisade is available with both diesel and petrol engines. Picture: Supplied.

It will also drive further without a fill-up – almost 1000km on the Palisade’s 71-litre tank compared with less than 700km for the petrol model. Add a caravan or boat to the equation and that gap will widen.

The Palisade’s petrol engine uses roughly a third more fuel than the diesel. The claimed average fuel consumption for the petrol is 10.7L/100km, while the diesel uses just 7.3L/100km.

At $1.80 a litre for petrol and $2 a litre for diesel, it’ll cost you $128 to fill a petrol Palisade and $142 to fill the diesel.

But remember, you’ll travel 300km further with diesel in the tank, so you’ll pay just $14.60 per 100km compared with $18.80 for the petrol.

Hybrids such as the Toyota Kluger trump both diesel and petrol-powered vehicles. Picture: Supplied.

The difference is even more pronounced around town, where most of us do our driving.

The petrol model uses a claimed 15L/100km, compared with 9.2L/100km for the diesel.

That means the petrol model will travel just 473km on a tank, at a cost of $27 per 100km, while the diesel will travel 771km between fills, at $18.40 per 100km.

You can expect to use more fuel than the official claim in bumper to bumper traffic, too. We saw as much as 18L/100km for the petrol version.

There is a third option.

Toyota’s Kluger Hybrid uses a claimed average of 5.6L/100km and just 6L/100km in the city.

It costs just $117 to fill its 65-litre tank and it will travel 1160km between fills at a cost of about $10 per 100km.

In town, the cost would be $10.80 per 100km.