- Four of the UK's remaining eight oil refineries are up for sale as the major companies rush for the exit, Martin Quinlan writes
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Profits off the boil
The worldwide refining business is seeing margins fall as capacity bottlenecks disappear. Meeting rising diesel demand at a time of declining utilisation rates is the next challenge, Martin Quinlan writes
Making diesel
MAKING diesel is relatively easy – in contrast to making gasoline, which is difficult. The diesel (compression ignition) engine is tolerant of its fuel so diesel specifications are fairly wide. But increasing a refinery's output of diesel economically is far from easy.
Most refiners make their diesel as a straight-run distillation product, so their main option for raising diesel production is to increase distillation loadings – but this results in increased output of all streams from the distillation unit. Diesel accounts for up to 25% of the distillation yield with heavy fuel oil (HFO) making up 15-50%, depending on the type of crude. With HFO selling at less than the price of crude – about $110 a barrel in Rotterdam last month – disposing of the surplus has a negative effect on overall margins.
