NS pays $1.28/ gallon for diesel...

[GP40-2]

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.

[edbenton]

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.

[Big_Boy_4005]

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.

[cnw4001]

QUOTE: Originally posted by GP40-2

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.

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.

[Big_Boy_4005]

QUOTE: Originally posted by cnw4001

QUOTE: Originally posted by GP40-2

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.

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?

[cnw4001]

QUOTE: Originally posted by Big_Boy_4005

QUOTE: Originally posted by cnw4001

QUOTE: Originally posted by GP40-2

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.

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

[Anonymous]

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.

[csxengineer98]

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

[csxengineer98]

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

[Big_Boy_4005]

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]

[Anonymous]

QUOTE: Originally posted by dave e

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.

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.

[miniwyo]

Do the RR's use the same Red diesel as they do in the Ag industry, or do they use commercial Blue/Green Diesel?

[Anonymous]

do any of you know 45 cents of gasoline is a goverment tax? those greedy ***s.

[Anonymous]

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..

[Anonymous]

[: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 [e-mail]

[Anonymous]

[: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 [e-mail]

[Anonymous]

QUOTE: Originally posted by miniwyo

Do the RR's use the same Red diesel as they do in the Ag industry, or do they use commercial Blue/Green Diesel?

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

[richardy]

QUOTE: Originally posted by jhhtrainsplanes

QUOTE: Originally posted by miniwyo

Do the RR's use the same Red diesel as they do in the Ag industry, or do they use commercial Blue/Green Diesel?

Railroad diesel fuel is a pinkish color.

I was under the impression that railroad DID pay taxes on their fuel.

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.

[markn]

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

[miniwyo]

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.

[csxengineer98]

QUOTE: Originally posted by danhonn

[: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 [e-mail]

have to keep in mind that a 747 is also carrring around 300 or so people ( idont remember the extact amouth of passanger that it can carry fully loaded) as well as crew and baggage... and whats the most you can fit in your truck? maybe 5.... so figer that if it was possable for all the people to drive to hawaii... that would be 300+ times the fuel costs... in gas for each persons car... also a truck is not the "average" they get less per mile then cars....
also... they dont rate locomotives on miles per gallon ...its gallons per hour used... i never did the math to find out how what the MPG was on my run..but on a 98 mile run with 2 -9s..pulling 130 loads of coal..toping out at around 16000 tons..it took about 600 gallons per unit to get me over the road... that was running at almost notch 8 the whole way... at an average speed of somewhere between 25 and 50 mph... slow orders not counting...
csx engineer

[rrnut282]

Lets see, I used to do this for a living....
Jet A weighs 6.7 pounds per gallon. The DC9-30 would burn about 3400 pounds of fuel on a 150 mile flight with 100 on-board. That's 507 gallons or .05 gallons per passenger per mile. A 747 is roughly 6 times bigger in gross take-off weight, though it won't be 6 times as efficient. In csx engineer's example, fuel usage comes out to .00075 gallons per ton-mile. Cars, trucks, or even buses cannot come anywhere close to those efficiencies. So their costs will be higher.
Taxes only make the situation worse.

[Murphy Siding]

You used to be the guy that made up story problems for algebra tests?[:D]

[oltmannd]

QUOTE: Originally posted by jhhtrainsplanes

QUOTE: Originally posted by miniwyo

Do the RR's use the same Red diesel as they do in the Ag industry, or do they use commercial Blue/Green Diesel?

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

RRs don't pay highway tax, so they don't use the dyed, highway diesel fuel. They do pay a "deficit reduction" tax on fuel, but that is being dropped soon (or has it already?)

[Anonymous]

Diesel and gasoline is colored to identify non highway sales. A farmer or railroad will have a certain color of diesel or gasoline indicating that he is using the fuel that is exempt from highway use tax. We could do this for our lawn mowers, but do you want to go through all the trouble to find the non highway gasoline just to save a few cents? The opposite to this story is do not get caught using non highway colored fuel in your car or truck. You will quickly find out haw nasty the taxing authorities can be. By camparison the IRS is a push over.

[Anonymous]

QUOTE: Originally posted by wrwatkins


We could do this for our lawn mowers, but do you want to go through all the trouble to find the non highway gasoline just to save a few cents? The opposite to this story is do not get caught using non highway colored fuel in your car or truck. You will quickly find out haw nasty the taxing authorities can be. By camparison the IRS is a push over.

Do you speak from experience here? [:0]

I ask someone who would know about the tax issue. He said the railroad does not pay a highway tax on its diesel fuel. He did say the railroad does pay other taxes on the fuel.

[adrianspeeder]

Yup, highway tax is the biggest difference between on and off road diesel. Even at that price, I wouldn't think of burnin off road diesel as I think the fine in PA is several thousand dollars.

Adrianspeeder

[Anonymous]

No, I have never used the wrong color of diesel. In fact the only diesel I use is an occasional gallon to help start a fire. Do not use gasoline for this use as it is too explosive. I have read about people who have been nailed for using non highway fuels on the road. They diserve to be zapped. Working in the oil fields you can get "drip gas" that will run in a car. Your car will knock something terrible. I question if you have any valves remaining after using drip gas for a while. About the only way to stop the engine would be to pull up to a tree, put the car in gear, and let the clutch out until the engine stalled. Only fools would use drip gas in their car.

[Paul Milenkovic]

This business of oil companies making obscene profits:

Oil companies are public stock corporations, and if a person thinks there is a killing to be made on oil, they can buy oil stock. We all get the news and know what is going on in the world, and that the price of fuel would be going up has been brewing for some time now.

Story I read in the financial press is that oil profits are up, and oil stocks are also up (should have bought low and sold high), but oil stocks are not really that high because people don't really believe that the oil prices are going to last. If people really believe that oil prices were going to last, not only would a person buy oil companies, a person could buy Ballard Power Systems (for fuel cells) or any of a whole bunch of energy-saving or alternate energy stocks.

But how many of you out there are going to bet real money on long-term high oil prices by buying any of those stocks? Its called free-market capitalism, and anyone can play, and yes the system is "rigged" by industry insiders, but if a person really believed in high oil prices in terms of putting some money down on that belief, there are a whole lot of investment opportunities.

[Murphy Siding]

Are the railroads doing anything diferently as o flate to conserve fuel, as this would have to be a big expensive drag on the bottom line. How about out on the road? Do they watch fuel *mileage*?