How Refiners Work The Gasoline Industry

A refiner processes (or refines) barrels of crude oil into various products. Gasoline is one of those products. 20% of every barrel of crude provides our gasoline needs.

Refiners ensure that their gasoline makes it to the Retail Gas Outlets. They distribute gas through pipelines, they truck it to various destinations, and they even send it via rail.

Some refiners supply gasoline to independent dealers. Others supply gasoline to jobbers. You can believe this or not, some refiners even own their own gas stations. These have-your-cake-and-eat-it-too-kind are called integrated refiners.

Giant firms like ExxonMobil, Shell, BP, Sunoco, and Chevron Texaco are integrated refiners. As you can see, some of these brand names are heavy hitters in the marketplace.

Yep! Some still have the best of all worlds. Integrated refiners own their very own refinery. In addition, this special breed also owns their very own Retail Gasoline Outlet.

In the US, almost 80% of the refineries are owned by… you guessed it right, integrated refiners.

Here’s a surprising statistic. Those gasoline outlets we have been discussing? Well, a whole heap of them have disappeared. In 1994, they exploded to around 205,000. Nine years later they plunged to around 168,000.

Where did they disappear? I couldn’t find any figures indicating how many of the integrated refiners’ gas stations did a Houdini during that period?

However, it must be remembered, anytime you lower your margins while taking the corners, you must make it up by increasing your volumes on the straightway. Maybe physical constraints had a part to play.

Refineries ingest a barrel of crude in one end. And out the other end flows a myriad of petroleum products. Of which one is gasoline. Refineries also distribute their wares to the retail outlets.

Refineries are a horse with a different color. I say this because over the years refineries have been shrinking, while at the same time expanding. Roughly, over the last 60 years, the number of refineries has dramatically decreased from 399, way down to 149.

While at the same time, the remaining refineries have been expanding. Technology has played a major role in this expansion. Refineries have jumped from producing 5 million barrels per day, to producing 16 million barrels per day. It’s called, doing more with less.

It is well known, that of late, refiners have been smiling all the way to the bank. This doesn’t have to be. You can make a difference. You can take action now.