Gasoline Profits Increased, but Price Decline Projected
We examine the gasoline data and predictions of the Energy Information Agency (EIA). These show that the profit margin of wholesale gasoline over the price of crude now exceeds more than $1.20 per gallon, whereas previously it was less than $0.50 per gallon. The projections from June on show a decline of around $1 in the wholesale price per gallon. These are shown in the figure below.
We see below that refining capacity fell from 19.0 million barrels per day (mbpd) in 2020 to 18.1 mbpd in 2021 due to the slowdown from Covid, and possibly from restrictions on emissions.
The list and the graph below shows the principal refinery shutdowns in the US regions. Not included is the Philadelphia Energy Systems refinery of capacity 335,000 bpd that closed in 2019 after an explosion. (It is confusing if this is included in the 2020 decline.) The bpd of these refineries adds up to 800,000 bpd, as indicated in the previous graph. The Y-axis units show the refinery capacities of the five geographic regions listed in mbpd, and shows the regional decreases that these refinery closures made.
Without showing data saturated tables, we look at Annual Gross Input to refineries, and compare 2021 to the previous peak. We also compare this to the latest March 2022 data.
The US input peaked in 2018 at 17.316 mbpd. In 2020 this fell to 14.723 mbpd, and in 2021 increased to 15.671 mbpd, which is still short by 1.645 mbpd from the maximum year, or 9.5% short. For March 2022, input was 16.378 mpd, short of the maximum by 0.938 mbpd or 5.4%.
The West Coast Region, called PADD5, consists of California, Oregon, Washington, Alaska, Hawaii, Arizona, and Nevada. Its peak year was 2018 at 2.649 mbpd. In 2021 it was 2.260 mbpd, a drop of 0.389 mbpd or 14.7%. For March 2022, it improved to 2.402 mbpd, still 0.247 mbpd below the maximum, or low by 9.3%.
In oil and gasoline, the price is literally “all the traffic can bear”.
