Diesel from well to station – understand the price chain

Until the diesel reaches the final consumer, the path is long. Oil has to be transported from the production site to a storage terminal. This journey can be from hundreds to thousands of kilometers. Then it will be pumped through pipelines to a refinery, which is where a portion of the oil turns into diesel. Refined diesel is subsequently pumped to a fuel distributor. It is at the distributor that diesel is mixed with 10% biodiesel, in addition to the addition of other additives that improve fuel performance. Tank trucks finally take the diesel to the dealership, where consumers can refuel their vehicles. Observe, below, how the costs are distributed along this chain. For analysis purposes, the average prices observed between March 17 and 23, 2019 were adopted.

1- OIL: the price of a barrel of Arab oil, one of the main references in the sector, in the analyzed period was US$ 60 on average. As we mostly use domestic oil and it is produced on the coast of RJ and SP, we have a discount of approximately US$ 5 per barrel on freight, so the oil arrived at the Brazilian terminals at US$ 55. With an exchange rate of 3,9 dollars per real, the barrel cost us R$ 214,5. A barrel has 159 liters of oil, so each liter of oil cost R$ 1,35.

TOOLS – FREE MARKET

2- STORAGE AND TRANSFER: Transferring oil from a ship to a storage terminal and transporting it to a refinery has a cost. It is estimated that this cost is R$ 0,05/liter of oil.

3- REFINING: oil arrived at the refinery at R$ 1,40 per liter. Refining costs were R$0,06, totaling R$1,46 to the refiner. After refining, 900 mL of diesel A was sold to distributors for R$ 1,93, on average. (GROSS REFINING PROFIT: BRL 0,47)

4- DISTRIBUTOR: the distributor received the 900 mL of diesel A (R$1,93) and mixed it with 100 mL of biodiesel (R$0,25), in addition to adding its additives. R$ 0,316 of CIDE/PIS/COFINS (federal taxes and contributions) and R$ 0,58 of ICMS (state tax) apply to a liter of diesel. The total cost to the distributor is R$3,07. He resold it to the gas station for R$3,18. (GROSS PROFIT DISTRIBUTOR BRL 0,11)

5- FUEL STATION: the final reseller received diesel from the distributor for R$3,18 and resold it for R$3,54. (GROSS PROFIT POSTED: BRL 0,36).

A summary of what was described is presented in the figure below.

It is worth remembering that the values ​​described above are an average of the prices applied in Brazil, and may vary from one state to another.

Marcelo Gauto – Industrial chemistry - Specialist in Oil, Gas and Energy

SOURCES CONSULTED

ADVFN. Petroleum. Available in: . Accessed March 2019.

NATIONAL OIL, GAS AND BIOFUEL AGENCY (ANP). Price survey system. Available at: < https://preco.anp.gov.br/include/Resumo_Semanal_Combustiveis.asp>. Accessed March 2019.

FEFUELS. Taxation. Available in: . Accessed March 2019.

PETROBRAS. Diesel, composition of consumer prices. Available at: < http://www.petrobras.com.br/pt/produtos-e-servicos/composicao-de-precos-de-venda-ao-consumidor/diesel/>. Accessed March 2019.

PETROBRAS. Prices and Costs – refining costs. Available in: . Accessed March 2019.