I stole this from another board=
take a good look at what a barrel of crude oil costs. Divide that by 42 (that's how many gallons there are in a barrel). That number represents what the raw materials cost. Add in things like labor, maintenance, about $11 million a month in utility bills for the average refinery, and you will now know what it costs to make a gallon of diesel fuel.
The refinery I work for processes around 4,010,000 gallons per day on average and has an operating cost of around $8 per barrel. If the finished product sell for $9 per barrel more than the crude oil cost, we make $1 per barrel or 2.3 cents per gallon.
The crude oil we are processing right now cost us around $100 a barrel (you have to order it and pay for it in advance). That means we paid $2.38 for a gallon of it.
It costs us about 19 cents per gallon to process it and turn it into a good clean fuel. That is very efficient BTW.
This means the diesel we are making right now, this very minute, cost us $2.57 to make. We are selling it for $2.12 for a grand total of ... drum roll ...... a 45 cent per gallon loss. howz that for gouging? .
The spot price in the LA harbor area right now for diesel is $2.12 a gallon wholesale. The difference between that price and the price you pay is called mark-up, and that is done by an independent distributor and retailer. Not an oil company.
It will settle down once crude stabilizes and we start getting deliveries of the cheaper crude, and once refineries stop over-producing diesel. Probably by spring.
If, if we were lucky enough to be be processing crude today that cost us $69 a barrel we'd be happy as hogs in shoot. We'd be making diesel that only cost us $1.83 a gallon to make and we'd be making 29 cents a gallon! Oh that would be nice, but it ain't reality. We can dream, can't we?
By the time the refineries start processing crude purchased at today's price, diesel will probably be selling for around $1.85 wholesale for a net profit of 2 cents.
maybe the big bad oil companies aren't so big or bad after all?