{"id":34924,"date":"2022-06-09T23:20:19","date_gmt":"2022-06-09T23:20:19","guid":{"rendered":"https:\/\/tahrir2day.com\/news\/2022\/06\/09\/refineries-cash-in-as-petrol-prices-soar-2\/"},"modified":"2022-06-09T23:20:19","modified_gmt":"2022-06-09T23:20:19","slug":"refineries-cash-in-as-petrol-prices-soar-2","status":"publish","type":"post","link":"https:\/\/tahrir2day.com\/news\/2022\/06\/09\/refineries-cash-in-as-petrol-prices-soar-2\/","title":{"rendered":"Refineries cash in as petrol prices soar"},"content":{"rendered":"
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Data shows oil refiners are making nearly five times more money refining gasoline than they were a year ago.<\/b><\/p>\n<\/div>\n

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A lack of capacity to refine gasoline and diesel from crude oil has helped drive fuel prices to record highs and boosted profits for refinery owners.<\/p>\n<\/div>\n

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Gasoline prices are at an all-time high, although oil prices remain well below record levels.<\/p>\n<\/div>\n

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The loss of Russian supplies has weighed on an industry already operating at full capacity.<\/p>\n<\/div>\n

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On Wednesday petrol prices rose at their fastest in seventeen years and on Thursday the cost of filling up a typical family car topped \u00a3100 for the first time, raising costs for motorists. <\/p>\n<\/div>\n

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Part of the rise can be attributed to high crude oil prices, which are currently above $120 a barrel, buoyed by fears that the war in Ukraine could limit access to supplies from Russia.<\/p>\n<\/div>\n

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This has added billions of dollars to oil producers’ profits and prompted the UK government to impose a \u00a35bn windfall tax on North Sea oil producers.<\/p>\n<\/div>\n

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    \n
  • Fuel prices: why is petrol so expensive in the UK?<\/li>\n
  • Fuel costs: How to save on petrol and diesel<\/li>\n<\/ul>\n<\/div>\n<\/div>\n
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    But oil refiners — the companies that convert crude oil into diesel, gasoline and other products — are also seeing their profits soar significantly. <\/p>\n<\/div>\n

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    “Refiners are printing money right now,” said Neil Crosby, a senior analyst at data firm OilX. “More than you’ve ever seen.”<\/p>\n<\/div>\n

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    There is a shortage of refining capacity, which has led to a significant increase in “refining margin” – the difference between what they pay for crude oil and what they can make selling the refined products.<\/p>\n<\/div>\n

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    \u201cThis is a real sticking point in terms of the industry’s ability to produce these fuels. This is reflected very strongly in the wholesale price of diesel and petrol,\u201d says Mr Crosby.<\/p>\n<\/div>\n

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    And that has contributed to the fact that the oil price is still far from record highs, but petrol and diesel are setting new records every day.<\/p>\n<\/div>\n

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    Figures from data company Refinitiv show how the oil refining business has become so profitable over the past year.<\/p>\n<\/div>\n

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    As of June 10, 2021, refiners earned $9.26 per barrel refining gasoline and $6.84 per barrel refining diesel. <\/p>\n<\/div>\n

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    On Wednesday, they earned $43.11 on gasoline, up 366%, and $51.13 on diesel, up 648%.<\/p>\n<\/div>\n

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    Figures released by BP, which owns a number of refiners in Europe and the US, show that its own measure of refining profits, the “refining marker margin”, rose to $35.7 last year from $7.7 a barrel . <\/p>\n<\/div>\n

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    US oil giant ExxonMobil owns a number of refineries including Fawley in Hampshire, the largest in the UK. Last month, the Financial Times quoted its chief executive officer, Darren Woods, as saying he didn’t think the “very, very high margin environment” was “good for economies around the world.”<\/p>\n<\/div>\n

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    A source close to a major refiner owner argued that refiners don’t set margins themselves. Crude oil, gasoline and diesel prices are determined by the market \u2013 what supplies are available and how much buyers are paying.<\/p>\n<\/div>\n

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    Why are refinery margins so high?<\/b><\/p>\n<\/div>\n

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    Before the invasion of Ukraine, much of Europe’s supply of petrol and diesel was produced in Russian refineries and imported in tankers. In 2020, the UK got 18% of its diesel supply from Russia.<\/p>\n<\/div>\n

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    While that supply hasn’t completely stopped, volumes from Russia are significantly lower as buyers avoid Russian exports before sanctions are fully in place.<\/p>\n<\/div>\n

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    Fuel supplies were low before the invasion, and there was already a global shortage of refining capacity. The sector has not been very profitable in recent years and attracted little investment.<\/p>\n<\/div>\n

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    So there was no gap to make up for lost Russian refining capacity. <\/p>\n<\/div>\n

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    The global lack of refining capacity has contributed to high fuel prices in other countries, including the US. <\/p>\n<\/div>\n

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    In addition, China has reduced its exports of refined fuels. And although the UK does not import directly from China, it has had a knock-on effect throughout the world market, says Mr Crosby.<\/p>\n<\/div>\n

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    ExxonMobil did not respond to a request for comment. BP declined to comment.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Data shows oil refiners are making nearly five times more money refining gasoline than they were a year ago. A lack of capacity to refine gasoline and diesel from crude oil has helped drive fuel prices to record highs and boosted profits for refinery owners. 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