Refinery fuels costs have endured an unsteady course since 2003. As shown in the accompanying table, most of the PADD residual fuels’ increases in cost occurred in 2004 and 2005 for all five PADDs. PADD 4 experienced the least variance while PADD 3 incurred the highest variance in price over the period.
The cost for natural gas for refinery usage decreased a fair amount through 2003, and then increased during 2004 and dramatically in 2005. These conclusions are based on costs of an average refinery fuel consisting of 1 bbl each of PADDs 1-5 and an average US cost of $4.40/MMscf of natural gas (a 1 bbl equivalent on a btu content basis). Raw residual fuel oil and natural gas prices come from publications published by the US Department of Labor. Biggest variations occurred in PADDs 2, 3, and 5. PADD 4 increased during the period in yearly average to 1,274.0 from 901.6.
PADD 1’s 3-year averages started with 1,102.9, increased to 1,130.7, and then reached 1,539.6. All indexes shown are based on 1956 = 100, the basis of the Nelson-Farrar Operating Index for an average US refinery.
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