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Interesting data, Mark
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Posted by Dave in Houston (more from Dave in Houston) on Fri, 28 Feb 2003 22:09:01 Share Post by Email
In Reply to: Re: 93 octane vs 87 - Price of Gas ---- Go Figure!!, Mark Fox, Fri, 28 Feb 2003 15:23:28
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I'm not sure who's making all the money either. I'm an engineer, and was never involved in the marketing end of the business.

Being a former refinery guy, though, I am sympathetic to the difficulties they are having in today's market.

The price of light sweet crude is what, about $36 a barrel? That's about $0.86 per gallon. So for another fifteen to seventeen cents a gallon, they have to process it (that's energy intensive, and part of the barrel makes products less valuable than gasoline), pay their taxes, pay their employees, pay the interest on the billion dollars it cost to build the refinery, and pay a dividend to their shareholders.

That's a tough business!

(A brief pause as Dave blushes, grins sheepishly, and descends from soapbox.)

By the way, one other thing to remember about the price of premium vs. regular: The difference in the cost making premium vs regular is lowest in the winter.

In the winter, the vapor pressure specification is higher, so more normal butane and similar components can go in the gasoline without violating the vapor pressure spec. Normal butane is relatively cheap and pretty high octane.

I imagine you'd see a higher difference in the New York Harbor price of 93 vs 87 in August.

(Class, this is the end of today's lesson on the refining business.)

Best regards,

Dave

posted by 24.206.9...


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