25 comments on It's That Time Again (or Refining 101: Winter Gasoline)
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However, a note about gasoline outside of the U.S. - my local source of oil retailing information (an independent dealer of heating oil, raps oil, biodiesel, gasoline, etc.) has never heard of summer/winter gasoline, and still assuming we both understood each other adequately after 10 minutes of discussion (mistakes crop up easily where basic assumptions may be quite different), there is no such difference in Germany.
Admittedly, the weather extremes are considerably narrower, but the retailer felt that different formulations for different weather was not necessary, and was still quite puzzled at the idea as I left.
This may be more a matter of custom than anything else. And for the record, Germany remains a huge heating oil market, so the refinery switch is essentially the same, but not the blending.
Perhaps, in a market where more of the cost per unit is tax, the difference realised is so much less in percentage terms that there's less market advantage in saving a few cents per litre from changing the blend contrasted with the complexity costs from managing the seasonal variation
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Jaymax (cornucomer-doomopian)
that little difference is a big margin. There are also reasons to change RVP in winter in terms of driveability. Summer gas has so little vapor in cold temps it's hard to get your car to start.
What portion of the reduction is passed on to consumers?
If it's all of it, then there's no margin in it at all, just market share protection necessities - which is where the high tax element in europe might push the issue towards redundant.
I can't speak to the technical stuff except to say that cars in the UK are harder to start in winter - my old MG used to border on the impossible...
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Jaymax (cornucomer-doomopian)
as little as possible of course!
but refining margins tend to be much lower in fall.
Right now the US gasoline crack is just $5/bbl down from near $30 in April/May. US gasoline is down 40+ cts/gallon ($17/bbl) at the wholesale level while crude is up $10/bbl
So the consumer is defn getting a bit of a break at the expense of the refiners. This is one reason not to expect much more drop off in gasoline prices this fall. They can't fall much without refiners cutting runs.
It's real. If you look at gasoline specs you see one called "drive ability index" Has inputs of RVP and front end distillation temperatures IIRC. Basically measures whether you can get things started.
I can't speak to the point about different formulations for hot or cold, as my only direct source of knowledge was completely unaware of it. A dimly recalled web search from years ago was also fruitless, though the mechanic for my BMW bike in the U.S. always maintained that Euopean gasoline and motor oil was refined and formulated to a much higher standard than common in the U.S.
However, as for the idea of costs being buried under taxes - absolutely no way. Prices here can shift 5 euro cents a liter in a day (or something like 25 US cents a gallon) - those shifts have absolutely nothing to do with taxes. However, they do seem fairly directly tied to the euro/dollar exchange rate, and the price of crude. Not perfectly, and as always, the price goes up like a rocket, and falls like a feather, but the correlation is pretty clear, as is the causation.
Nice to see even Europeans can believe in a myth of exceptionalism. European gas was cheaper and easier to make in my day. Most European refineries couldn't meet US RFG specs even back then.
Now Euro diesel was better stuff. Europeans demanded 45+ cetane while we lived with 40 in the US to be able to bury all the LCO from FCC units into the pool.
Which all then still leaves the question, why, when Summer/Winter gas is significant and known in the US, is Summer/Winter petrol unmentioned (or non-applicable?) in Europe?
still curious...
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Jaymax (cornucomer-doomopian)