19.5 gallons of crude oil are used to make one barrel of gasoline.
How many litres of petrol does a barrel of oil yield?
Simply put, crude oil prices were $56.73 per barrel at the time of writing this article in Hyderabad, and the ‘/$ exchange rate was Rs 65.28, resulting in a per barrel crude oil value of Rs 3,703.33. In Hyderabad, the current market price of petrol is Rs 74.83. Oil Marketing Companies (OMCs) rarely pay bills at spot market rates because they usually have long-term contracts and the price is determined by averaging. A barrel holds 42 gallons (159 litres) of liquid. If a litre of crude oil costs Rs 23.39 and a litre of petrol costs Rs 74.83, where does the remaining money, Rs 51.44, a whopping 68.7% of the price we pay, go?
Despite the fact that the price of the final product (petrol) is directly related to the price of its input (crude oil), the relationship is not always linear due to intermediary processes and government interference. After purchasing crude oil, the OMC must refine it to make end products such as gasoline, diesel, and kerosene. Crude oil is a complicated mixture that can yield up to 1,500 different byproducts. To suit our domestic needs, we in India, notably IOC, extract only 150 byproducts from the refining process. As a result, the price of a litre of crude oil is never the same as the price of a litre of gasoline. The type of oil used in the refining process has a significant impact on the volume of gasoline produced. The refining procedure is tailored to match the needs of each country. Per barrel of oil, refineries in the United States produce roughly 20 gallons of gasoline, 12 gallons of diesel, four gallons of jet fuel, and a few additional byproducts. Regrettably, Indian refineries are quite secretive about their refining processes. We can use those data in a similar way in an Indian scenario.
In India, how much fuel is made from a barrel of crude oil?
The amount of each product obtained during the refining process is variable. In Figure 1, a pie chart depicts the percentage of the final 170 liter volume that each component contributes. Vehicle fuels appear to make up a significant amount of the final result in the image. Gasoline accounts for roughly 73 liters of the final 170 liters, diesel and heating oil for about 40 liters, and kerosene-type jet fuels for about 15.5 liters. Despite the fact that these figures are large, this does not imply that the other items are ineffective. Petrochemical feedstocks, for example, account for only 4.2 liters of the final 170, but they are used to create a wide range of products, from pharmaceuticals to plastics. Here’s where you can learn more about the wide range of products that can be made utilizing petrochemical feedstocks.
Still gas, petroleum coke, heavy fuel oil, asphalt, lubricants, aviation gasoline, naphthas, and waxes make up a small percentage of the final product but are quite useful in a variety of applications.
How much does it cost to convert crude oil to gasoline?
As of July this year, unbranded petrol is subject to a Central Excise Duty of Rs 21.48, according to PPAC. State VAT or other costs will be added on top of that. Telangana, for example, levies a state tax of 35.2 percent on gasoline and 27 percent on diesel. Telangana buys petrol at a rate of Rs 55.34 per litre if we calculate backwards. Central excise duty accounts for Rs 21.48 of that total. After state taxes and Central excise duties are deducted, the cost of petrol is Rs 33.86 per litre. The price of crude is currently Rs 23.29 per litre. The cost of refining, OMC margins, and dealer margins will total Rs 10.57 if one litre of crude yields one litre of petrol (it will generally be more if we translate all the byproducts in monetary terms).
Why is diesel less expensive than gasoline?
State-owned oil companies raised diesel rates for the 18th day in a row on Wednesday. When compared to the global context, diesel has been the most expensive of the vehicle fuels, owing to the product’s higher manufacturing costs in many foreign countries.
Diesel has always been more expensive than petrol at its basic price, even in India. Diesel, on the other hand, has always been less expensive because it is utilized by farmers as well as truck and bus fleets. As a result, diesel is cheaper than gasoline in India, easing the strain on farmers and transport fleet operators.
What is the value of a barrel of oil?
A barrel of crude oil may appear to some as a slimy substance whose only redeeming quality is that it will someday be converted into gasoline.
Researchers dismantled an average barrel of domestic crude oil to see what may be made. Domestic crude oil, by the way, has a gravity of 32 degrees and weighs 7.21 pounds per gallon.
Here are the results of a single barrel of crude oil:
- Enough liquefied gases (such as propane) to fill 12 small (14.1 ounce) cylinders for usage at home, on the road, or in the workshop.
- Enough gasoline to travel 280 miles in a medium-sized automobile (17 miles per gallon).
- To make one gallon of tar for mending roofs or streets, mix one gallon of asphalt with one gallon of water.
- To manufacture around a quart of motor oil, you’ll need the following lubricants.
- Enough distillate fuel to operate a heavy vehicle for nearly 40 miles (five miles per gallon). If the fraction of jet fuel is included, the same truck can travel over 50 miles.
- A power plant using residual fuel generated about 70 kilowatt hours of electricity.
- Charcoal briquettes (about four pounds).
- 170 birthday candles or 27 wax crayons can be made using this wax.
How much LPG can a barrel of oil produce?
A normal barrel of crude oil in the United States comprises 42 gallons of crude oil, which yields approximately 44 gallons of petroleum products. Refinery gains result in an additional 6% of product, resulting in an additional 2 gallons of petroleum products. Refineries in the United States create about 19 gallons of gasoline and 10 gallons of diesel fuel from a barrel of crude oil, as seen in the graph below. The remaining one-third is made up of items like jet fuel and heating oil.
How much does a barrel of oil cost to turn into gasoline?
The process of refining crude oil into gasoline and diesel is known as refining. The cost of refining varies depending on the standards of the finished product and the additives used to improve it. Summer gasoline, for example, has low evaporation rates, which are essential to reduce excessive air pollution. Furthermore, gasoline is produced in a variety of power and performance levels known as octanes (i.e. 87, 89, and 93). The higher the octane, the higher the manufacturing cost. Detergents have been added to both gasoline and diesel to clean engines and improve performance. These additions also raise the price. Depending on whether summer or winter formulae are used, the cost of refining gasoline ranges from $.40 to $.70 per gallon. The cost of refining gasoline is $.60 per gallon in the case above. Diesel refinement costs $.49 per gallon.
The second largest component, accounting for around 33% of the total, is the cost of wholesale petrol to the supplier, which is dependent on the price of raw materials such as crude oil and refining charges. Petrol prices fluctuate in tandem with oil prices, which are notoriously volatile. For example, after Russia invaded Ukraine last month, oil prices surpassed $100 per barrel, and prices have grown by roughly 80% in the last year.
In Saudi Arabia, how much does it cost to produce a barrel of oil?
Because OPEC members are the lowest-cost oil producers, unrestricted production by cartel members would significantly lower Russian and American market share.
A business with market power can maximize its profit by limiting output, according to every microeconomics textbook. Such quantity constraints may cause production to be moved to other companies in some situations. If such firms are relatively high-cost producers, this production misallocation benefits the market-powering firm, but it implies society must pay more than it would otherwise to achieve a given output.
The researchers estimate the costs of output misallocation using data from Rystad Energy. These figures comprise estimates of oil output and costs for 13,248 oil fields that were operational between 1970 and 2014.
The cost of producing oil varies depending on the geologic formation. In 2014, these expenses ranged from $7 per barrel in Saudi Arabia’s Ghawar field to $21 per barrel in Norway’s offshore fields to $51 per barrel in the Bakken shale in the United States.
OPEC members have far lower production costs than other producers. Throughout the study period, production costs per barrel in Saudi Arabia and Kuwait rarely exceeded $10 per barrel, with median costs of $5.40 per barrel. The cost of production in the 95th percentile was around $10 per barrel. Outside of the OPEC cartel, however, the median cost was closer to $9.70 per barrel, with the 95th percentile being $28.20 per barrel. As a result, if OPEC withholds production, say by limiting output from its most expensive fields, production will rise in the rest of the world’s more expensive areas, resulting in misallocation of production. The cost increase will be substantially greater if OPEC withholds output from its cheaper fields, like as those in Saudi Arabia.
The oil business in the United States has been shaped in great part by the shift away from inexpensive OPEC reserves and toward the rest of the world. In 2005, shale generated only 24 million barrels of oil out of a total of 2480 million barrels produced in the United States, or less than 1%. Nearly half of the 4173 million barrels of oil produced in 2014 came from shale. The key driver of an increase in the average cost per barrel of US oil from $7.30 in 2002 to $20 in 2014 was the expansion of higher-priced shale oil extraction. According to the researchers, this increase in shale oil output would not have happened if OPEC members had not imposed supply restrictions.
The researchers compare the cost of actual production each year with the cost of producing the same amount of oil using the lowest-cost fields, as would occur in a competitive market, to determine the influence of OPEC’s market power. They indicate that if production were distributed among countries to reduce costs, the market share of the Gulf nations with lower production costs would have climbed from 25.8% to 74.4 percent in 2014. In comparison to current output percentages of 13.3 and 3.0 percent, Saudi Arabia’s portion would rise to 28.1 percent and Kuwait’s share would rise to 12.5 percent. Non-OPEC, higher-cost producers’ output would have decreased, with the United States’ market share dropping from 13.2 to 1.3 percent and Russia’s from 14.4 to 4.7 percent.