Biodiesel Prices and Expected Retail Markups
 

It's recently came to my attention that my local retail outlet for B100 typically charges a 25¢ - 35¢ "handling fee". So if I go directly to Austin BioFuels I can get fuel for $2.65/gallon, but at my closest retail store (who shall remain nameless) is currently charging $2.89/gallon but I have paid as high as $3.10/gallon in recent months.

To me it seems weird to charge that much of a premium just to collect peoples money. The fuel is delivered for free, the pumps and tanks are provided by ABF for free so there is literally zero investment on the end of the retailer. They just have to be open and have a 120V plug for the pump.

I know that Houston BioFuels is currently charging $2.40/gallon at their pumps, so just knowing that I am spending 50¢/gallon just because I live in Austin instead of Houston really irks me.

What do you guys think, is charging a 25¢-40¢ handling fee acceptable? Does anyone know what the typical markup the dinodiesel receives from the retailer? I was expecting the profit margin to be more in the area of 05¢-10¢ for the retailer.

How can you expect alternative fuels such as biodiesel to catch on when the retailer is taking advantage of their customers like that?

It sounds like Texas has some pretty strange policies! I live in Arizona and I'm currently paying $2.85 a gallon and it doesn't fluctuate. I don't think it's right to charge a handling fee unless they are going to the source to get it, but I know that the state can effect pricing policy. Do you want to go to the source with a 55 gallon drum in a truck and fill up from there is the question!:P

I've already priced it out, why do you think I'm posing the question here :D

Delivered to my house, no charge for the 55 gallon drums or delivery, I can get it at $2.65/gallon. 110 gallon minimum.

Once I sell one of my 4 cars, I'll probably do that :)

Greed. What do you expect? Making money is the whole point of owning a business.

I don't really expect them to catch on, at least not until the price of petro fuel gets much higher (maybe by a factor of 2 or 3).

I agree, and it will.

Perhaps. But let biodiesel peddlers get your business, 'cause they ain't gonna get mine. Ever notice how bio-D always costs more than diesel, even at $3-plus a gallon? As long as bio makers peg their prices on dino, and not the cost of veggie, they can burn it themselves.

In Madison, they used to be worse. You could buy B100 at over 50 cents the cost of regular diesel. Look at the prices http://www.prairiefirebiofuels.org/ and compare it with $2.61 that I got. Their lower price is after I pay the $150 a year membership.

OTOH, they are having a space set up, processing the payments, etc, etc so why not tack on a handling fee? Why would they allow me to set up a hot dog stand there for nothing? One of the Home Depots has a hot dog stall there that sells pretty decent hot dogs. They definitely charge him money for setting up a stand there. If you pay with a credit card, they lose 3-6% off the top.

Everything is relative......
 

I have to travel over 100 miles....one way.....to purchase any bio-diesel......period.....so I do the 110 gal (2x55 drums) trip in my gasser F-150 at 16 mpg.....so it costs me about $30 in gasoline to run bio-diesel in my car and tractor......hope to find a VW caddy that isn't rotted out to cut this cost.....but till then I live with it.....

Who owns your Bio-Diesel service station?? If it's an independent dealer....maybe they are charging a bit much. BUT, I'll bet it's a major oil company...and they don't want the price of Bio to be cheaper than Petro.....there should be some Federal Legislation requiring that say 10% (or whatever seems reasonable) of ALL Fueling Stations carry Bio-Fuels.....both E-85 and B-100......that's the only way it will ever get closer to me......:rolleyes:

SB

BD will become widely available only if/when the economics support it and the major diesel manufactures endorse it's use. Until them it will be limited to the lunatic fringe. The bubbas with the new domestic diesel pickups are not going to be interested unless they can save some money without risking their warrantee. The big trucks will use whatever the guy in the office tells them to.

Hey, I resemble that comment...!!!
 

Lunatic Fringe and Bubba......dude.....and proud of it.....!! :D

maybe more of a Lunatic Bio-Bubba.........:D

SB

Who wants to be part of that 10% then? I don't. I will sell it if it sells but I don't want to stock something up that takes me months to move. E85 I don't care for personally. Great that it uses ethanol but the price is too close to regular and the power and economy aren't there. At least not with most cars. Even with my truck that was E85 capable, it sucked in power and the mileage dropped. So unless it gets way lower than a few cents different, why would I want E85? So I can spend more time filling up?

Is that handling fee per gallon? I betcha they don't get that kind of profit per gallon on the dino fuels they sell. Maybe you should spread the handling fee word around your locality and get some good health price competition going?

I'll have to look into that around here. I'd like to see someplace closer to where I live that carries the stuff.

Chicken vs. Egg
 

If there is no outlet for the fuel, then no one will purchase E85 or Diesel vehicles....therefore no vehicles will run the fuel......thus no dealers should be required to stock it.....because it doesn't sell.....why doesn't it sell.....because no one purchased the E85 or Diesel vehicles because they can't buy the fuel......

That kinda sounds like our Legislative bodies......

I think this is why our society is on the skids......

SB