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Refining capacity
In this section we summarise how the limited supply of oil refining capacity can affect fuel prices.
It’s not just the overall demand for crude that’s increased - in addition, supply from the refineries is limited. In order to try and meet the growing demand for refined products (particularly in China, India, US), refineries around the world are now running at near full capacity.
Looking to the future, new refineries will need to be built to continue to meet demand, but these are long-term, capital intensive investments that will take time to come on stream - hence supply from existing refineries is limited. A key factor in the development of new refineries is the significant investment required to build and operate them, which is also increasing due to more stringent environmental standards globally, both in terms of environmental performance at refineries and cleaner fuels.
Factors that drive fuel prices
Demand
OPEC
Refining capacity
Taxes
Operating costs
Shell's commitment
