Fuel Cost

[Campground Cattle]

One of the main reasons diesel is so high is the new EPA regs many refineries have opted out of making it.
The refinery I work in made 8,400,000 gallons a day and now we produce 0 for on road use. Citgo has opted out on the Gulf Coast shipping their diesel to other countries as well, I would have to research the others.
Why make 15 ppm sulphur diesel when you can sell it around the world without the extra refining.
The EPA changed the Spec from 450 ppm sulphur to 15ppm on diesel.
Gasoline specs have been changed also from 100 ppm sulphur to 30 which requires additional refining to produce.
If you mess up a batch that is 40 ppm you can't sell it as it has to be reran.
Ethanol is being mandated by the government as a replacement for MTBE the precentage of ethanol blended effects the price tremendously as the latest figures I seen ethanol was costing us 3.50 a gallon plus.
There are also not just three blends of gasoline any longer like in the old days, we make over a 150 different blends for different parts of the country now to meet government regulations. This gasoline can only be sold in the areas it was made for, so if your long in Atlanta you can't ship it to St Louis.

Government regulation at it's best

Exxon makes more off the Cokes and Chips you buy than they do the gasoline in there stores. Why do you think they ran Ma and Pa out of business and put a convience store with every gas pump. Cokes are over 12 dollars a gallon and no telling what a pound of potatoe chips are.

 

[cfpinz]

Thank you for the explanation. It's nice to hear from someone with knowledge and facts on the fuel situation, I know nothing about it.

cfpinz

 

[Workinonit Farm]

There are also not just three blends of gasoline any longer like in the old days, we make over a 150 different blends for different parts of the country now to meet government regulations. This gasoline can only be sold in the areas it was made for, so if your long in Atlanta you can't ship it to St Louis.

I did not know this. Thank you for enlightening me.

Katherine

 

[Wewild]

Exxon makes more off the Cokes and Chips you buy than they do the gasoline in there stores. Why do you think they ran Ma and Pa out of business and put a convience store with every gas pump. Cokes are over 12 dollars a gallon and no telling what a pound of potatoe chips are.

I always wonder if pay at the pump was something they all wanted to do or had to do. It had to hurt their spontaneous purchases.

 

[Campground Cattle]

Exxon makes more off the Cokes and Chips you buy than they do the gasoline in there stores. Why do you think they ran Ma and Pa out of business and put a convience store with every gas pump. Cokes are over 12 dollars a gallon and no telling what a pound of potatoe chips are.

I always wonder if pay at the pump was something they all wanted to do or had to do. It had to hurt their spontaneous purchases.

Oh they want you in the store not just buying the gas.
The money to be made by lets take Exxon is in production and retail. Exxon does not care who they sell there oil to or who supplies there stations fuel. Exxon sells thier oil to the highest bidder they don't care if it is Shell or Citgo or if it is Fina in France or China's national oil company. Gasoline and diesel are fungible products when you pull up to the Exxon pump you can be purchasing Citgo,Shell,or anybody's product. It just has to meet federal specs and they add their additive package.
Exxon as well as ever other oil company would love to get rid of every refinery they own as this is the major cost of doing business with the lowest returns. It is kind of like hay equipment both are nessacary evils to do the business.
If Oil is at 54 dollars a barrel it is costing the refinery 1.28 a gallon, most refiners target .07 to .09 cents a gallon operating cost. This does not include mandated ethanol cost.
The refinery I work for targets a penny a gallon profit over operating expense we run 21,000,000 gallons a day.

Retail store's and production are dirt cheap in operating cost compared to the refineries and where the profit is made.
Crude is a commodity business going to the highest bidder just like the sale barn.
Production is operated as an independent business selling to the highest bidder.
Refining is also operated as an independent business as well looking for the cheapest supplier of oil to the best price for there product no matter who the buyer is in the world.
I have seen products go overseas for a penny a gallon more profit.
And retail is looking for the cheapest supply also.
To make a long story short even if the oil was produced here and product was refined here doesn't mean it stays here.

Don't forget as well as most states average .50 cents a gallon in taxes and retailers plus transportion averages another .50 cents a gallon.