Wednesday saw the fastest rise in petrol prices for seventeen years, and on Thursday the cost of filling a typical family car passed £100 for the first time, piling costs on motorists.
Part of the increase is down to the high price of crude oil, which is currently above $120 per barrel, driven up by fears the war in Ukraine would cut access to supplies from Russia. That has led to billions of pounds of extra profit for oil producers.
But oil refiners - the companies which turn crude oil into diesel, petrol and other products - are seeing their profits rise substantially too.
“The refiners are printing money at the moment,” says Neil Crosby, senior analyst at the data firm OilX. “More than they have ever witnessed.”
There’s a shortage of refining capacity, which has led to substantial increase in the "refining margin" – the difference between what they pay for crude oil and what they can make selling the refined products.
“This is a real crunch in terms of the industry’s ability to produce these fuels. That very much turns up in the wholesale price of diesel and petrol,” says Mr Crosby. And that's contributed to the fact that although oil prices are still some way off record highs, petrol and diesel have been setting new records day after day.
On the 8 June 2021, refiners were making $9.26 per barrel from refining petrol, and $6.84 per barrel refining diesel.
On Wednesday, they were making $43.11 on petrol, up 366%, and $51.13 on diesel, up 648%.
Figures published by BP, which owns a number of refineries in Europe and the US, shows its own measure of refining profits, the ‘Refining Marker Margin’, up from $7.7 dollars per barrel to $35.7 over the past year.
US oil giant ExxonMobil owns a number of refineries, including Fawley in Hampshire, the UK’s largest. Last month the Financial Times quoted its chief executive Darren Woods as saying he did not think that the “very, very high margin environment” was “good for economies around the world.”
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