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Global Energy Management on Coursera: Oil Production Economics

Gasoline & Diesel Oil Updates

The Economics of Carbon Based Fuel Production

After crude oil costs, taxes are the second largest contributor to the price paid at the pump. Together Federal and State excise taxes on fuel account for an average cost of approx. 62 cents per gallon. Rates include Federal excise taxes 18.4 cpg for gasoline and 24.4 cpg for diesel. cpg = cents per gallon

How Many Gallons of Gasoline Come From A Barrel of Crude Oil ?

One 42 gallon barrel of oil produces 19.5 gallons of gasoline, plus many other products such as kerosene, etc. The yield of gasoline from crude oil depends upon the quality of the crude oil, and the amount and type of processing at the refinery.

So called "light sweet" crude yields more gasoline per barrel than "heavy sour" crude, for a given amount of refinery processing. Much of the gasoline can be liberated from light crude by simple distillation, whereas with heavy crude, more complex catalytic cracking, reforming and other steps are required to get the same amount of gasoline.

With basic refinery processing, a barrel of sweet, light crude produces about 30% gasoline, or 12.6 gallons. By contrast, a barrel of heavy sour crude, with basic processing, yields about 14% gasoline, or 5.88 gallons. More extensive processing -- cracking, reformation, etc. -- can greatly improve yields, but of course, at the cost of the increased processing. Overall, refineries in the USA are yielding about 49% gasoline (20.5 gallons) from the mix of crudes they process (2004 data). --Contrablue -- Source: Credit

Institute for Energy Research