FYI, with all the talk of rising gasoline prices, I though you all might be interested in what RR’s pay for diesel.
NS paid $1.28/gallon in the second quarter of this year for diesel. That was up from $0.86/gallon from the same quarter last year. NS, on average, uses 40-50 million gallons of diesel per month. NS has instituted a fuel surcharge cost to shippers to help recover the increase costs.
One reason why the RR’s pay so little for fuel is they by in bulk and also do not have to pay fuel taxes. Add roughly 50 cents to what the RR’s pay and you will get what the fuel is actually costing.
Gee, if I needed diesel I would want to get it at their price. Stations around here are getting around $2.60 per gallon. I realize they are a bulk user, but that’s a hell of a discount. I would be curious to see the next quarter’s figures and see how much it jumps.
At the risk of being contrary, it should be remembered NS, or other businesses for that matter, pay zero for their fuel. Their customers pay for the fuel.
Yes, of course that is true with any transportation business, the customer pays. The local trash hauler has even added a fuel surcharge to my garbage.
The first question is when does a fuel surcharge become a rate increase? The second is does the gross revenue increase of the surcharge actually exceede the increased expenditure on the fuel? IE, are the surcharges billed making a profit, or are they just a true offset of the additional expense?
i assume the question is rhetorical but to further the conversation I’ll answer.
The surcharge becomes a rate increase when it doesn’t go away when the reason for the surcharge disappears.
Is the surcharge a profit? Figure the number of customers and multiply the surcharge by that number, how much fuel would the added surcharge buy?
Of course no company would use a surcharge as a profit center!
Dale
Railroads, airlines and other large users of fuel play the futures markets and lock in large amounts of product at low prices a year or two in advance.
not much more then what farmers pay for the stuff… the fuel taxs that you pay for gas at the gas station is what hurts…
csx engineer
oh yea…also…you have to keep in mind…that gas and diesel are not the same thing by a long shot… gas is even more refind then disel fuel is…so it costs more to produce…
csx engineer
CSX, the funny thing is that lately, diesel prices have been higher than gasoline prices. Sometimes by as much as 30 cents per gallon.
Dale, “Of course no company would use a surcharge as a profit center!” [banghead][:P](Unless they knew they could get away with it.) If you mean to be sarcastic, smileys help.[swg]
If they just took an extra buck or two on each carload, it would add up fast. Much faster than trademark licensing fees.[}:)][banghead][;)][(-D]
Odd, I just heard on the radio that airlines saw a 60% increase in their fuel costs this year. So are they just doing like the local gas station and rasing are fares to hedge for the future? They I think said United and one other are and the small airlines are soon to follow.
Do the RR’s use the same Red diesel as they do in the Ag industry, or do they use commercial Blue/Green Diesel?
do any of you know 45 cents of gasoline is a goverment tax? those greedy ***s.
Just remember that the oil companies are making record profits on our backs, and that 85 members of the Senate voted for the energy bill to help subsidize those ***s…
[:D]The mayor of my town is talking about raising the gas tax to fix the streets. I wonder, if Congress had to pay for the gas they burn 'HA!" they would probably scream too! I wonder, if the RRs knew back in the 40s and 50s that fuel would cost so much, would we still be seeing H8s on the C&O, EM-1s on the B&O, and 4000s on the UP?
On an added idea, look how much cities are spending to put ‘light rail’ or streetcar lines back in. How was it said, “the mistakes of the past will come back to bite you in the a**.” will we humans learn anything from this? I don’t think Spock would hold his breath.
danny meandmrd@sbcglobal.net
[:0]As an addition to my reply, I remember reading that to go from Hawaii to California, a Boeing 747 burns enough fuel to drive the average car for a year. How’s that for fuel economy? Let’s see…my 2001 Dodge Ram is getting 20 to a gallon…how far could it go on that much fuel? I also remember an article on the Frisco 1500s that said they could get 4 miles to a gallon of bunker c oil. How does that compare to a Dash-9 or SD-90?
danny meandmrd@sbcglobal.net
Railroad diesel fuel is a pinkish color.
I was under the impression that railroad DID pay taxes on their fuel.
For related into on diesel fuel, gas prices, and other such info check out this link.
http://www.trains.com/community/forum/topic.asp?TOPIC_ID=13781
Depending on the state they may pay some sales tax but not the road use tax which is the big one, the blue/green diesel. Here the railroads get the same fuel I use for my generators, it seems more red than pink but some people have a slighty different color vision. The fuel guys that sell it to me refer to it as red or green.
Maybe I am confused-but the tax we pay on gas is a “user fee” for the highway/upkeep" etc-the railroads “basically” pay for their own right of way/tracks/upkeep etc and pay property tax on the land to boot-now this flys in the face of railroad retirement having a special income tax situation because , I beleive, Harry Truman had to bite the bullet in the early 50’s to break a strike make special compromise to get the union and company to go back to work and like the S & L deal in the 80’s, we the people are eating it–sorry I digressed but hey just tell me what I am paying for/my fair share-I’ll pay it- don’t roll it and hide 6 other not related programs in it. MTCW
The difference betewwn red and green diesel is that green is what you get from the pump at the gas station for you Big Rig or for your Dodge Cumins turbodiesel (in Adrian’s case his Power stroke, or is it power smoke [:)]) and Red diesel is for use in like Construction and Farm type equipment.(and RRs too) You can get in really big trouble running red diesel in a personal vehicle. As said before Green diesel is taxed, Red isnt taxed as much.