Petroleum Economics - Gasoline Economics and Refinery Operation (With Discussion)

Gasoline is undoubtedly of major importance not only to the petroleum refiner but to the producer. To study the economic aspects of gasoline is, in a measure, a constructive effort to solve the problem of overproduction not only for the refiner but for the entire petroleum industry. After all, the prime object of producing crude petroleum is to supply motor fuel and lubricants to nearly 25,000,000 American motor vehicles, not to mention the increasing demand for these products abroad. Since gasoline furnishes the chief source of revenue to the refiner, it follows that this important product should veritably become recognized by all branches of the petroleum industry as an almost infallible index of day to day requirements of the producer and the refiner. A careful study of gasoline statistics over the past decade or more reveals that there is a definite correlation between world-wide gasoline requirements and the demand for crude petroleum, as well as all other petroleum products. This leads the writer to the conclusion that gasoline is literally the economic yardstick of the entire petroleum industry. Control of Operations That the refiner has begun to recognize the urgent need for controlling his operations is evidenced by the results of the past three years. Unfortunately, it is a difficult problem to convince the refiner that he cannot run crude in excess of the demand for gasoline, without incurring a consequent decline in the market value of this and all other products of distillation. Undoubtedly, he still has much to learn in this respect. Few commercial products have enjoyed such phenomenal growth in demand as has gasoline, and, at the same time, few products have failed, as has gasoline, to reap financial benefit from the popular demand for a national necessity. Perhaps this unprecedented demand was responsible for the overextension of retining facilities, which resulted in the excesses of recent times; at any rate, as the demand for gasoline grew by leaps and bounds, so the refining industry continued to increase its capacity for