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post #21 of 34 Old 03-07-2012
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Re: All US Diesel for boats is red?

I've only seen red diesel at marinas in the US for years. Nevertheless, it is more expensive than its taxed counterpart on land. Go figure.


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post #22 of 34 Old 03-08-2012 Thread Starter
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Re: All US Diesel for boats is red?

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Originally Posted by blt2ski View Post
paulo,

Diesel found in marina's will be generally speaking red. Go to a station to fill your diesel car./truck etc, and it will be clear'ish to green. Red meaning that the road tax has not been paid! Sales tax/vat equal, should and would have been paid.

marty
So it is clear now, Marine fuel is red because does not pay road tax!

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post #23 of 34 Old 03-08-2012 Thread Starter
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Re: All US Diesel for boats is red?

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Originally Posted by Minnewaska View Post
I've only seen red diesel at marinas in the US for years. Nevertheless, it is more expensive than its taxed counterpart on land. Go figure.
So, diesel that pays less Tax (and is red for that reason) is more expensive than full taxed diesel, that is clear?

Something strange there. Not my problem but I an curious, why?

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post #24 of 34 Old 03-08-2012
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Re: All US Diesel for boats is red?

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Originally Posted by PCP View Post
So, diesel that pays less Tax (and is red for that reason) is more expensive than full taxed diesel, that is clear?

Something strange there. Not my problem but I an curious, why?


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Paulo

Because you're at a "marina" dock. It costs less to the marina, no tax, but they mark it up more than the road taxed fuel re-sellers do so the net benefit of un-taxed fuel to boaters, is really no "benefit" at all after they slap you with the "marine" premium...
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post #25 of 34 Old 03-08-2012
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Re: All US Diesel for boats is red?

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Originally Posted by Maine Sail View Post
Because you're at a "marina" dock. It costs less to the marina, no tax, but they mark it up more than the road taxed fuel re-sellers do so the net benefit of un-taxed fuel to boaters, is really no "benefit" at all after they slap you with the "marine" premium...
I'm sure they would argue that marinas are lower volume than your average auto gas station and have to recoup infrastructure and operating costs. Those costs may be burdensome, given environmental protection requirements and the cost of insurance to carry fuel over water.

Nevertheless, I smell a rat and suspect they get it all back and then some. I will bet 90% of recreational boaters have no idea the marina doesn't pay road tax on the fuel, nor even realize how much road tax is at the gas pump. That makes it fairly easy to take advantage.

Ultimately, I'm with MS on what's going on.


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post #26 of 34 Old 03-08-2012
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Marina Profits and Federal Fuel Taxes

Quote:
Originally Posted by Minnewaska View Post
I'm sure they would argue that marinas are lower volume than your average auto gas station and have to recoup infrastructure and operating costs. Those costs may be burdensome, given environmental protection requirements and the cost of insurance to carry fuel over water.

Nevertheless, I smell a rat and suspect they get it all back and then some. I will bet 90% of recreational boaters have no idea the marina doesn't pay road tax on the fuel, nor even realize how much road tax is at the gas pump. That makes it fairly easy to take advantage.

Ultimately, I'm with MS on what's going on.
Actually at least for a number of marinas the profit from fuel does not make up for the risks and insurance costs. That is why the general trend for the past decade is for marinas to remove their fuel docks. This usually happens when the EPA requires an upgrade to something related to the fuel dock - hose, pump, tank etc. I have talked to more than one marina operator who has shut down the dock because they believed they would never be able to recoup the cost of the upgrade much less make any money selling fuel.

BTW the Federal Highway Tax on fuel is $0.244 per gallon on diesel and $0.184 on gasoline. Not anywhere near as high as most people think. Of course, the producer (think Exxon Mobil) makes about $0.01 per gallon. So the Feds make 25 times as much as the evil oil companies. Go figure.
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post #27 of 34 Old 03-08-2012 Thread Starter
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Re: All US Diesel for boats is red?

In Europe, in not very touristic places, marina pump stations don't have an operator. You put your bank card, fill the tank, and the money is taken from your card. How expensive is that?

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post #28 of 34 Old 03-08-2012
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Re: All US Diesel for boats is red?

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Originally Posted by Minnewaska View Post
I'm sure they would argue that marinas are lower volume than your average auto gas station and have to recoup infrastructure and operating costs. Those costs may be burdensome, given environmental protection requirements and the cost of insurance to carry fuel over water.

Nevertheless, I smell a rat and suspect they get it all back and then some. I will bet 90% of recreational boaters have no idea the marina doesn't pay road tax on the fuel, nor even realize how much road tax is at the gas pump. That makes it fairly easy to take advantage.

Ultimately, I'm with MS on what's going on.
No doubt, but the road stations have to deal with the same EPA and the cost of regulations too. It is no more or less legal to have a leaking underground tank 500 miles from the water or 500 feet. Its still going to cost..

As near as I can tell road stations make about 10% or so per gallon. The marinas lose about .50 per gallon in taxes and charge as much as $1.25 per gallon more, making the net difference in per gallon cost as much as $1.75 per gallon.... A $1.75 per gallon difference is a LOT of margin....

I use the $1.25 difference because I have seen it regularly. I remember one occasion when road fuel was running $3.75 and our local marina was charging $5.30 per gallon.....

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post #29 of 34 Old 03-08-2012
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Re: All US Diesel for boats is red?

State road tax on diesel is roughly .15-.25 cents a gallon so total tax is in the .40-.50 cents per gallon range for diesel.

As far as the difference between marinas and convenience stores, marinas are usually much harder to get to and don't hold as much (smaller tanks). So it's generally cheaper overhead wise for a distributor to send a full 8500 gallon tanker load to a store than it is to send 1000 gallons on a smaller truck to marinas. Now it's not .50 per gallon cheaper, and it's sure not $5.30 vs. $3.75 different, but it is more expensive for the marina than the store. And convenience stores, etc. are not making 10% on a gallon of gas. Margin on fuel stays roughly the same regardless of the rise or fall of prices.
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Re: All US Diesel for boats is red?

Quote:
Originally Posted by utchuckd View Post
State road tax on diesel is roughly .15-.25 cents a gallon so total tax is in the .40-.50 cents per gallon range for diesel.
Our State tax in Maine, on road diesel, is 31.2 per gallon as of July 2011.

Maine Fuel Taxes

The federal tax per gallon for road diesel is 24.4:

If we add 24.4 to 31.2 we get = 55.6 per gallon road taxes in the State of Maine for a gallon of diesel. Marina's selling off road fuel (which in Maine is ULSD) and heating oil dealers, do not pay this road tax and pay no tax on red dyed fuel. The only tax is a 5% sales tax which gets paid by the end user but not for home heating oil just off road fuel.. Thus they can potentially save 55.6 per gallon over the road stations per gallon price if their buying at the same price..

I was pretty close with "about .50". though a little low for Maine....

Quote:
Originally Posted by utchuckd View Post
As far as the difference between marinas and convenience stores, marinas are usually much harder to get to and don't hold as much (smaller tanks). So it's generally cheaper overhead wise for a distributor to send a full 8500 gallon tanker load to a store than it is to send 1000 gallons on a smaller truck to marinas.
Depends upon the marina. My friend ran a large marina in NH and filled up sport fishing boats and mega yachts at a very good clip. These guys were filled at what I would have to guess is "transport" pricing. The boat I worked on could easily burn 400-500 gallons per day at about 120GPH and this was one of but 30 or so boats that ran to the fishing grounds regularly.. They were sometimes required to bring the tanker right to the marina forto fill some of the larger 100+ foot yachts. They used a huge "transport" type volume. Still the price charged per gallon to the customer, even in large volumes, was higher than the local road stations despite no state or federal taxes.

I can really only talk to what goes on in Maine and what I have personally seen. One day in 2010 I got behind the fuel delivery truck from our local fuel station which had just filled them up with ULSD. I followed it at 12 MPH the 1.2 miles to our local marina and then watched as the guy filled the marina tank. I specifically asked if this was ULSD or if he had another tank in the truck. "We add the dye at the tank farm in South Portland but use the same fuel as the road stations do, ULSD. There are multiple tanks in this truck.".. Neither station was getting diesel at "transport" pricing, our local station is a single entity mom & pop convenience store and gas with one diesel pump. Both of these fills could be considered "straight job" which is a slightly higher price than a full tanker "transport" pricing.. This same local station is the one where I noted the $1.25 difference between road and marina pricing...





Quote:
Originally Posted by utchuckd View Post
Now it's not .50 per gallon cheaper,
When you subtract the 55.6 tax in Maine it can be less by that amount taking out any volume discounts.

Quote:
Originally Posted by utchuckd View Post
and it's sure not $5.30 vs. $3.75 different, but it is more expensive for the marina than the store.
Those were actual local prices for marina diesel & road diesel from last summer. Not a joke.... Our local station was $3.75 and the marina $5.30 on the same day both of these locations are filled by the same distribution truck.. I remember it well because I needed about 30 gallons and considered jerry jugging it...


Quote:
Originally Posted by utchuckd View Post
And convenience stores, etc. are not making 10% on a gallon of gas. Margin on fuel stays roughly the same regardless of the rise or fall of prices.
You are correct on that. That was my recollection from conversations with my friend Craig who owns a station in NH. I just called him and he told me he tries to make about 10-18 per gallon if local competition allows. This means that as the price goes up he makes less as a %. The last time we discussed this gas prices were much lower and the 10% number stuck in my head...

Still $3.75 vs. $5.30 with no road taxes is a large difference in net profit. That may certainly not be the case everywhere but in Maine it is a spread I have personally seen..

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