How indexes have changed

Indexes For Selected Equipment Items [137,691 bytes] Itemized Refining Cost Indexes [198,495 bytes] Continuing a trend starting in 1983, the Nelson-Farrar refinery construction index rose slowly from 1,407.8 in January 1996, to 1,465.5 in December 1997. The labor component of the index rose at a more rapid rate than did the material component. The labor index rose from 1,733.8 to 1,822.9 over the 2-year period, while the materials index rose 10.6 points, from 918.8 to 929.4.

April 6, 1998

Gary FarrarContributing Editor

Continuing a trend starting in 1983, the Nelson-Farrar refinery construction index rose slowly from 1,407.8 in January 1996, to 1,465.5 in December 1997. The labor component of the index rose at a more rapid rate than did the material component.

The labor index rose from 1,733.8 to 1,822.9 over the 2-year period, while the materials index rose 10.6 points, from 918.8 to 929.4.

The miscellaneous equipment index rose 17 points in the 2-year comparison. The category includes pumps and compressors, electrical equipment, heat exchangers, instruments, and engines. They are thus manufactured items, and their costs are a measure of manufacturing efficiency.

The Nelson-Farrar refinery operations index increased 11.2 points from 413.6 to 424.8 in the 1996-1997 period. The process unit index also showed an overall increase during this period, increasing from 457.9 to 483.1.

These two indexes varied somewhat randomly, showing month-to-month cost variations without any masking effect. Changes in the cost of refinery fuel accounted for much of the oscillation. Continuing increases in refinery operating efficiency helped stabilize values of both indexes.