Super
Simulate crude price blowouts, refining bottlenecks, and crack spread volatility. Stress-test wholesale diesel and gasoline rack pricing, transport fuel surcharges, and operating margin downside in real time.
Projected net monthly fuel cost change ($) across varying crude prices and diesel crack spreads, factoring in your 65% surcharge pass-through and 30% hedge coverage.
| Component | Per Gallon ($) | Monthly Gross ($) | Mitigation / Protection | Net Absorbed ($) |
|---|
When oil executives announce that the "fuel crisis is here", the stress is typically not only crude extraction volume, but rather secondary refining capacity, hydrocracking constraints, and distillate yields (diesel, heating oil, jet fuel).
Global refinery runs operate with limited spare sweet crude distillation capacity. When diesel crack spreads widen past $35/bbl, commercial transportation costs detach from basic crude moves. Fleets that rely solely on crude hedging (e.g. WTI futures) experience severe basis risk without ULSD/Gasoil product hedge overlays.
The standard benchmark for oil refining economics: three barrels of crude yield approximately two barrels of gasoline and one barrel of distillate fuel. Tracking the crack spread reveals whether retail price spikes stem from crude scarcity or refinery throughput limits.
Diesel and jet fuel require heavier crude fractions and complex secondary units (catalytic crackers, hydrotreaters). High natural gas feedstock prices and sulfur removal standards often drive distillate cracks to historic premiums over gasoline.
A simple WTI oil hedge leaves commercial operators vulnerable to refining margin blowouts. When crude drops but crack spreads surge due to refinery outages, unhedged fuel buyers pay record pump prices despite falling crude.