Scuttlebutt red diesel posts

[KevB]

Re: imho need to improve the economic analysis

"buying a boat for £100k and paying £1/gallon for fuel, and buying the same boat for (say) £90k but paying £4/gallon, you would be indifferent right?"

Wrong, if this was the case we would have all bought petrol boats which has the added benefit of cheaper servicing costs.

Why is there only a fraction of petrol boats compared to diesel if the vast difference in the initial cost of the boat off sets the more expensive fuel??? I know some will say safety, possibly - but not the huge difference in numbers. My reason was that after the initial hit of paying more for the boat the actual usage costs seems more reasonable.

I would definitely give up boating if I had to pay significantly more for fuel.


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[Gludy]

"Diesel is currently what, about £1.30/gallon?"

Agreed or to be precise 5 litres is £1.30

"Road price is what, £3.50/gallon?"

Do not agree - its just touching £4 for 5 litres at present - I cannot purchase it anywhere near me for £3.50 per 5 litres. A Marina with its extra costs would be charging a premium of at last 30p per litre (they do this now) and so basically, even at 20 per litre) the charge is £5 per gallon

"Lets take your typical 35ft boat. A Fairline Targa 35 with typical twin Volvo AQAD 41/dp 200hp diesels uses 12 gallons an hour."

200 ho is small for a flybridge boat and 12 galls an hour is a low figure but lets ride with it.

"So per hour it'll cost £26 more. Average use is realistically about 50 hours a year (check any list of secondhand boats and look at the hours/year)."

Nope per hour even for these engines it will cost £60 as opposed to £15.60 - an extra £44.40 an hour. Take a more typical 100 hours and you have an extra fuel bill of £4440 .
If some folks buy a boat not to use it but just for posing then you a right the fuel makes no difference but for those who use our boats say 200 hours a year we are facing extra bills of £10,000, £20,000 and more per annum.

"So additional cost for our Fairline 35 Targa owner (of which even a 15 year old one is going to be circa £60K so we're not talking Mr. Breadline here) is about £1,320"
Not so as I have shown above.

"Even allowing for extra hours/fuel consumption/price increase you'll maybe wind that up to £1,500 - £2,000"
You are just wishful thinking - the facts are not as you state andf if you could let me know where I can purchase road fuel for £3.50 for 5 litres I would appreciate it.

"Certainly not £10-15 THOUSAND!" In my example it was that figure and many have engines bigger than the 200 hp ones you took.

"Now how much would you say his marina berth has gone up in the last 5 years...?"

Ours went up by about 15% which for the targa you are talking about is an extra £300 per annum over the last three years.

I cannot appreciate why you are denying the simplicity of these facts.


<hr width=100% size=1>Paul

 

[ari]

Because you are bending the facts to suit your argument. For example 1 gallon equals 4.5 litres, not 5 litres. Curent road prices are about 80p a litre so £3-60/gallon.

Probably the most typical 35 foot boats would be something like a Fairline 35 Targa or a Princess 35 flybridge, yuo don't get much more mainstream than these. Both twin Volvo 41's (TAMD in the Princess, AQAD sterndrive in the Fairline).

So lets up the consumption to 15 gallons an hour. Find a typical 10 year old example of the above and it'll have circa 500 hours on it, hence 50 hours a year (yes of course there will be exeptions, but in both directions).

So with the higher consumption (I ran a Fairline Targa 35 with AQAD 41's a couple of years ago which was bang on 12 gallons/hour at 24 knots but agree a flybridge with shafts would use a bit more), call it 15 gallons an hour.

So, £3-60x15 gives hourly cost at road prices, £54. Times that by 50, no hell, lets double it, times it by 100. £5,400. Now, lets assume that currently you are not paying red diesel prices, you're geting it FREE!!! You're into £5,400 extra a year.

In reality of course you're paying 30p/litre now roughly, £1-35/gallon. Times by 15 is £20-25 an hour. Times by 100 is £2,025

So in reality your in for another £3,375, and thats on 100 hours a year for a mid sized boat. On a more typical 50 hours you can halve that, £1,687-50

Yes a bigger boat will cost more, but then so will everything else.

Oh and of course all the above calculations assume that your 100 hours a year are at planing speeds from the second you fire up the engines to the second you stop. In reality of course a large proportion of those hours for most people will be ticking over on marinas, coming i and out of marinas, ticking over up rivers etc which will lower the fuel burn even more.

Long way off your £15,000 though aren't we...? Your figures don't even begin to stack up, I'm sorry :-S

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[jfm]

Re: imho need to improve the economic analysis

Kev, you misunderstand me. I was making an "all other things being equal" argument. I said the "same" boat, not a petrol boat.

If you were offered 2 identical (ie both diesel) boats, one for £100k and one for £105k but the dearer one included some special vouchers allowing you to buy much cheaper (diesel) fuel, and you valued that fuel discount benefit at £5k, you would be indifferent. That's all I'm saying. Rationally, if fuel costs rise there would be a reduction in the demand for diesel boats representing the effect of the this higher expected fuel cost. That would be a noticeable effect, but it would be the bottom dropping out of the market and a total destruction of the demand for 2nd hand diesel boats.

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[BrendanS]

Where does the 30p premium in marinas come from? Talking petrol not diesel here but average UK forecourt prices is 81p which pretty much reflects what I'm being charged locally - 82p

When I fill up the boat in Lymington, petrol is 83p per litre (Berthon Marina), or 85p (Lymington YH). Nowhere near a 30p markup

<hr width=100% size=1>Catapultam habeo. Nisi pecuniam omnem mihi dabris, ad caput tuum saxum immane mittam.

 

[Bejasus]

On the Broads last summer, petrol was 90-92p/litre

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[jhr]

Buckler's Hard petrol = 99p per litre /forums/images/icons/frown.gif ...but I think we've had this conversation before!

<hr width=100% size=1>Je suis Marxiste - tendance Groucho

 

[Moose]

Bucklars Hard Diesel is about 45p/l

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[Deleted User YDKXO]

Dunno where you get your figures from. I bought diesel for my car yesterday at 80p/l which is equivalent to £3.64/gal. Lets take your calculation for a boat doing 100hrs a season @ 20 gals/hr and assume that marine fuel is 30p/l or £1.36/gal
Current cost 100 x 20 x 1.36 = £2720
Future cost 100 x 20 x 3.64 = £7280
Difference = £4560
Nowhere near your figures and anyone boating on the S Coast and crossing the Channel can further mitigate the difference by buying fuel in the Channel Isles
As for mooring costs, the average 35 footer costs about £4000 to moor in the Solent


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[Deleted User YDKXO]

Re: imho need to improve the economic analysis

Hooray, somebody talking some sense at last

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[Gludy]

"Because you are bending the facts to suit your argument. For example 1 gallon equals 4.5 litres, not 5 litres. Curent road prices are about 80p a litre so £3-60/gallon."

Ok - lets be more accurate and take the gallon as 4.5 litres throughout. I currently pay 23p per litre so a gallon = £1.04p per gallon. I accept that other marinas charge more but then they would also charge more for white diesel.

"So lets up the consumption to 15 gallons an hour. Find a typical 10 year old example of the above and it'll have circa 500 hours on it, hence 50 hours a year (yes of course there will be exeptions, but in both directions)."

OK - I agree to 15 galls/hour as a mainstream boat charge. A ten year old boat with 500 on her is not uncommon but is considered low. I know some boats that have only done 4 hours since purchased three years ago! I know others that do hundreds a year. I really think we should work on 100 hours a year as typical.

"So, £3-60x15 gives hourly cost at road prices, £54. Times that by 50, no hell, lets double it, times it by 100. £5,400. Now, lets assume that currently you are not paying red diesel prices, you're geting it FREE!!! You're into £5,400 extra a year."

Marina prices for me would be four times the price = £4.16p per gallon. This increases your 100 hour fuel consumption to £6,240 an extra £4,680 over what would be paid now.

In my own case with 200 hours use and consumption of 50 galls per hour I am looking at a fuel bill of £44,600 per annum or an extra £33,450 to find and that means I will no longer have a boat in the UK.

In many cases the premiums charged by marinas are more than I have allowed for above and you could increase the base cost and extra costs by 25% for many south coast marina's.

So we end uup with south coast prices:-
Typical 30ft Flybridge - 35 foot Targa (12 gph):-
50 hours extra £2340 per annum
100 hours extra £4680 per annum.
200 hours extra £9,360 per annum.

Typical 35 foot flybridge cruiser (15 gph):-
50 hours extra £2925 per annum
100 hours extra £5850 per annum.
200 hours extra £11,700 per annum.

Typical 60 foot Cruiser (50 gph):-
50 hours extra £10,453 per annum
100 hours extra £20,906 per annum.
200 hours extra £41,812 per annum.

These, by any standards are significant figures - many will simply not be able to afford them - I certainly could not but the problem scales itself down throughout most boat sizes. You are also left with the marginal cost problem - as someone said - is it worth £500 to nip to France? The answer will mainly be no.

The hit you take depends on how keen a boater you are - the number of boats would drop dramatically and the proportion of boaters who just use them as marina picnic stages would increase.

Such a dramatic increase would, as I have said before, destroy the UK based cruising power boat business leaving it to, more than ever before, the rich.

"Your figures don't even begin to stack up, I'm sorry :-S"

Do you accept these figures? If not why not?
Do you accept that many would get out of boating because they simply cannot afford it anymore?










<hr width=100% size=1>Paul

 

[KevB]

Re: imho need to improve the economic analysis

Hi jfm

What I was trying to get across was that if a boat cost say £10k less than the equivalent but I have to pay £4 for fuel instead of £1.30, I would rather pay the extra 10k and take the hit at the beginning.
Currently a trip from Chichester to Yarmouth costs about £20-£25 each way, if suddenly this cost rose to £75 each way, I wouldn't go.
I know I would have to do a lot of trips to use up the £10k difference but my perception is that a weekend away is costing a lot of money.

This is why I used the analogy of diesel v petrol as this is exactly where I would be if... 1) diesel prices went up to forecourt prices, or... 2) I owned a petrol boat.

I currently have a huge mortgage on the boat but we enjoy boating as a family very much so this justifies the payments. If suddenly a weekend away cost in excess of £200 I can no longer justify the cost and our money would move away from the boating scene into something else.

I'm sure I am not the only one in this position thus fewer people spending their money on boating and all the associated expenses (marina's, restaurants, spares, must have goodies, servicing etc) which will have an effect on everyone who uses a boat, regardless of it's type of propulsion.

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[Gludy]

Re: imho need to improve the economic analysis

"I'm sure I am not the only one in this position thus fewer people spending their money on boating and all the associated expenses (marina's, restaurants, spares, must have goodies, servicing etc) which will have an effect on everyone who uses a boat, regardless of it's type of propulsion. "

You are far from the only once in this position - most are, at all ends of the spectrum.

I would be asked to find an extra £33,000 per annum. This extra alone could finance a boat worth £600,000. The extra fuel in my case is TEN times my marina fees.

For a one hour trip over to Ilfracoombe and back I would be asked to pay out about £500 in fuel costs - it is just not worth it.

Its is just like purchasing a petrol boat - how many petrol boats are there with twin 200 hp, 300 hp or 700 hp engines? Practically none - petrol boats are limited to cruising around the bay - very few exist in the cruising market.

If there was a boat on the market now - say a Princess 38 footer with twin 306 hp petrol engines costing £75 per hour in fuel to run - what price would it fetch compared to its diesel counterpart? The discount would be huge - not the 5% talked about but more like 50% and still hard to get rid of.

I love my boating and this is why I am so concerned because I know that its by bye UK boating for me. I also have many friends who do not have the choice of placing their boats outside the UK and these will just have to leave boating all together.

For what? No gain in the tax yield - an almost certain loss. In practice for nothing - and talk about how difficult it would be to find white diesel for the few left cruising around!!


<hr width=100% size=1>Paul

 

[jfm]

Bottom falling out of market

Kev:
We will lose this argument if we stick to that kind of micro economic "one-man's view" stuff. Anyone in government wanting to impose this tax would dismiss your last post as irrelevant.

You say "if a boat cost say £10k less than the equivalent but I have to pay £4 for fuel instead of £1.30, I would rather pay the extra 10k and take the hit at the beginning". I dont dispute that. But all you're saying is that your point of indifference is somewhere other than £10k Would you take the hit at the beginning if it was £40k? Of course not. So, we have established that your indifference point is some place between 10k and 40k

What I'm trying to say is the the macro economics tell you there will be an indifference point, the market will find it, it will be the macro-market's, not KevB's, but it might be in the order of £5-10k in these examples. That absolutely is not the bottom falling out of the market. So when the keep-red-diesel campaigners come out with unsubstantiated claims like the bottom wil fall out or the "industry will be decimated" or whatever, they will be considered to be manifestly wrong by the government bods (correctly, imho). And thus nothing will be achieved. To persuade government types, better and different argument is needed than has been made on several occasions on these forums, and indeed if the arguments made in some places hereabouts are put forward to government they will do more harm than good. all imho

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[Aardee]

50 gallons/ hour - is it any wonder Joe Public thinks we're all loaded!!!

Someone earlier made the point about a rise in fuel costs forcing manufacturers to produce more efficient boats.

I'm no engineer, but there must be a way of transporting 50-odd feet of fibreglass through the water at 30-odd knots using less than 50 gallons of diesel every hour..

I'm also no tree-hugging, lentil eating environmentalist, but even I'd feel a teensy bit guilty at burning 200 gallons of non-sustainable, smoky, stinky fossil fuel in the name of a morning's fun.

Please don't dismiss me as just another gloating raggie, you do have my sympathy. However, I do think we'll struggle to win over the hearts & minds of the general public. They (we??) felt strongly enough about fuel duties to blockade the distribution depots a few years ago. How do you suppose those same folks will respond to the news that you were happily frying 50 gallons/hour at a fraction of the cost while they were freezing their nuts off on the picket line.

I (sadly) can't see them rising up in support of a wealthy minority...

<hr width=100% size=1>"I am a bear of very little brain and long words bother me" - A A Milne.

 

[jfm]

Re: imho need to improve the economic analysis

Gludy:
Those arguments will lose the battle. You say no gain in the tax yield, but there has been no convincing case made to back that claim.

Then you say there will be few people left boating. But that isn't true. Anyone who is at their financial limit (whether by choice or means) in terms of what they spend now will give up boating with the extra costs (or travel25% of their former mileage). Others not at their limit will pay the higher prices. But those who give up will sell their boats, and someone else will buy them and run them.

Granted, the market price of the boats sold will fall, but that's all that will happen. Someone somewhere will buy them and run them. Ypou can't say no-one will buy them with fuel so expensive because in extremis if all twin diesel mobos were put up for sale for £1 each they would all get sold and the new owners would happily fill em with £4/gall diesel and sail to Ilfracombe or wherever. Th boat fixers would still be in work. The marinas and restaurants will too.

Just because some folk will give up boating doesn't mean the 250,000 (?) mobos in this country will disappear. (A few will disappear to france as you say)

The macro effects of white diesel will be a higher tax yield and lower overall fuel burn, both of which are what the government wants. We need different arguments from this flawed micro economic stuff. imho

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[KevB]

But I'm not wealthy, far from it. I just choose to spend my spare money on boating instead of holidays abroad/smoking/flash cars/designer clothes/big house/evenings out..........
Most I know do the same, sacrifice luxuries to run a boat.
I guess if you compare me to a dole drawing, non working, smoking, drinking, fast food eating, 10 kids supported by the state family then yes I may seem wealthy.
It's all relative I suppose!!



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[Planty]

Don't know about the math too much but do know that I filled up (F43, 2xVolvo 74's) on the Hamble 2 weeks ago as normal, quite happy normal running costs at 25p ish per litre after discount.

Following weekend over to Cherbourg, filled up for safety, French prices, nearly fell off my perch. First thing into my head and out of my mouth, "if it ever gets anywhere near these prices in UK, boat goes, end of story!". Simply couldn't afford to continue. Economic fact, not bluster, fact. I don't like to generalise but I don't think I'd be on my own. No point in me keeping a boat that I can only afford to sit on in a marina, boating for us is actually moving through the water.

Seems queer to me that anyone can argue that a fair old hike would not affect the boating and ancillary industries. I see an awful lot more French, Belgium, etc lorries on our roads now since the road fuel hike a few years back. Notice Mr Stobarts are virtually all foreign registered now too, who the hell had heard of Norbert Dentresangle before then either. It obviously hasn't hit the British part of that industry at all has it?

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[Joe_Cole]

Playing around with the figures is all very well, though I havn't got the patience to read through all this in detail.
Joe Public will simply look at the amount of fuel which is being used and simply say "Why the hell should these guys get their fuel at a fraction of what I have to pay for it" If it causes difficulty for some boaters then I am sure that Joe Public will simply say "Tough". Sorry, it's not a Raggie thing but I think that is what you are up against; its the politics of the situation. (At this point I need to emphasise the usual caveat that I am not saying this, but I believe that this will be Joe Public's view)

On another point. I am intrigued that so many Mobo's are saying that if fuel goes up they'll simply give up. Why not get a smaller boat and save money all round?

As far as I can see the best way to defeat this proposal is to prove that it will have an adverse economic affect and/or no tax revenue benefit. From what I've seen so far the case has not been made, though there have been some unsubstantiated doom and gloom forecasts which could be torn apart in seconds by the bureaucrats in Whitehall. The arguement needs to be properly researched, with less emotion, and properly presented. All IMHO of course.

Joe








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[Gludy]

"50 gallons/ hour - is it any wonder Joe Public thinks we're all loaded!!!"

Everything is relative - the problem will pass right through all power boat sizes.

" How do you suppose those same folks will respond to the news that you were happily frying 50 gallons/hour at a fraction of the cost while they were freezing their nuts off on the picket line."

Maybe they should consider their super low cost plane fuel when they fly out to Spain for a holiday - or the amount of fuel used just to transport folks on holiday.

Then they could ban helicopters because they use so much fuel - or we could stop business class because they have so much more space in the plane and are transported using higher fuel consumption per head.

I really can see no logical connection - mind you that would not stop the British trait of envy instead of wanting to aspire to success. Ignorance does not justify silly legislation.

If this the price hike happens the pickets would not have to worry because my boat and spending would go elsewhere. The government would need to raise even more taxes so the problem only increases - not decreases.

There is really no difference between a boat using 50 galls and hour taking more people/and or more luxury on a cruise compared to the boat doing 15 gph with fewer people and less luxury.

My figures just show why I would have no choice but to have the boat based overseas. I am trying to explain the effects on the marine industry. If the argument back from Jo public is lets do away with power boats then fine - this legislation will do the trick.

I would choose that it is too expensive to go for a one hour trip across to Devon but so would almost every other cruising power boater I know - with all different sizes of boat.









<hr width=100% size=1>Paul