Since the advent of the automobile age in the U.S., gasoline has been king of the road; today upwards of 95 percent of passenger cars and light trucks on American roads are gas-powered. And the federal government has done its part to keep it that way, taxing diesel at a rate about 25 percent higher than gasoline. A recent assessment by the American Petroleum Institute, an oil industry trade group, found that federal taxes accounted for 24.4 cents per gallon of diesel but only 18.4 cents per gallon of gasoline.
In Europe, where in many regions about half of the cars on the road run on diesel, these tax incentives are flip-flopped, with diesel drivers reaping the economic benefits accordingly.
But according to Jonathan Welsh, who writes the “Me and My Car” Q&A column for The Wall Street Journal, interest in diesels—which typically offer better fuel efficiency than gas-powered cars—has gained significant momentum in the U.S. in recent years given the uptick in gasoline prices. The popularity of diesels also surged, albeit briefly, in the mid-1970s after the U.S. suffered its first “oil shock” that sent gas prices through the roof. But gas prices settled down and so did American fervor for diesels at that point.
Today, though, with so much emphasis on going green, diesel cars—some of which boast similar fuel efficiency numbers as hybrids—are on the comeback trail in the U.S. Recently passed regulations require diesel fuel sold in the U.S. today to have ultra low emissions, which appeals to those concerned about their carbon footprints and other environmental impacts. Also, the increased availability of carbon-neutral biodiesel—a form of diesel fuel made from agricultural wastes that can be used in place of regular diesel fuel without any engine modifications—is convincing a whole new generation of American drivers to consider diesel-powered cars. Right now only Volkswagen, Mercedes and Jeep sell diesel-powered cars in the U.S., but Ford, Nissan and others plan to launch American versions of diesel models already successful in Europe within the next year.
Meanwhile, the U.S. Coalition for Advanced Diesel Cars, a trade group that represents several automakers as well as parts and fuel suppliers, would like to see the U.S. government increase incentives for American drivers to choose diesel-powered engines by leveling the fuel taxation field—so gasoline and diesel could be competing fairly at the pump—and by boosting tax breaks on the purchase of new, more fuel efficient diesel vehicles. One hurdle is the relative lack of filling stations across the U.S. with diesel pumps, but as such vehicles become more popular, filling stations that don’t already offer them can relatively easily add a diesel pump or two.
CONTACTS: American Petroleum Institute, www.api.org; U.S. Coalition for Advanced Diesel Cars, www.cleandieseldelivers.com.
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