Britain’s competition watchdog has turned its guns on oil refiners who point to high margins as part of an investigation into why fuel prices are so high.
The Competition and Markets Authority said it “found concern in the widening gap between the price of crude oil entering refineries and the wholesale price leaving refineries in the form of petrol or diesel”.
The war in Ukraine has exposed a capacity deficit in Europe, where Russia is a refinery powerhouse. Rising demand for non-Russian oil has pushed up prices elsewhere. Shell said this week it expects its refining profits to rise to $1.2 billion (£1 billion) in the quarter.
About a quarter of the petrol and 57% of the diesel used for road fuel in the UK in 2021 was imported via foreign refiners. Here are the six largest domestic refiners.
The facility at Ellesmere Port in Cheshire directly employs 900 people and supplies 16% of all road transport fuel. The government is concerned about the state of its finances and documents filed with Companies House show the company behind Stanlow is posting an annual loss., Essar Oil (UK) grew from $221 million to $321 million in 2021. Auditors have raised concerns about the company’s health. Essar is owned by Mumbai tycoon brothers Shashi and Ravi Ruia, whose empire spans shipping, oil, metals and mining. His fortune was estimated at $2.2 billion by Forbes last year and Ruia Haveli is said to be one of the five most expensive houses in Delhi.
The refinery is located on the Firth of Forth in Grangemouth, Scotland and has been refining since 1919. Around 2,000 people are employed at the site, including 600 in the refinery itself. It is owned by Petroinos, a joint venture formed in 2011 between Chinese state-owned oil company PetroChina and Ineos, part of billionaire Jim Ratcliffe’s petrochemical empire. Earlier this year, city sources said that PetroChina was keen to sell its stake after it went from a loss of £26.1m in 2019 to £89.9m in 2020. Ratcliffe, which is valued at more than £6bn according to the Sunday Times. To make Monaco tax free in 2020. Earlier this year he made a £4.25billion bid to buy Chelsea Football Club but was unsuccessful. The tycoon has invested his fortune in the football clubs of Nice near Monaco and Lausanne in Switzerland. He also owns the Belstaff fashion brand and builds a rival car for Land Rover.
The North Lincolnshire Refinery supplies crude oil mostly from the North Sea. It was opened in 1968 and today employs around 1100 people. It is owned by a subsidiary of the American multinational ConocoPhillips, based in Houston, Texas. Shares of the $112 billion giant are up 45% over the past year, and its earnings have grown nearly sixfold to $5.8 billion in the first three months of the year, up from $1 billion in the same period period of the previous year. A handsome dividend of 46 cents per share was paid last month. ConocoPhillips is led by oil industry partner Ryan Lance, who is also a board member of the National Fish and Wildlife Foundation. Lance, who grew up in Montana and began his career in the Alaskan oil fields, saw his salary drop 15% last year but was still making $24 million, 133 times more than the average ConocoPhillips employee.
The South Wales refinery employs about 500 workers and processes 270,000 barrels a day of black stuff that turns crude oil into end products like diesel, jet fuel and heating oil. Texas-based Valero Energy bought the operation from Chevron in 2011 for £447m. Valero is valued at $43 billion and its shares are up 35% as energy stocks have boomed this year. In April, it told Wall Street that its quarterly refining margin had doubled from a year earlier to $3.21 billion. In 2019, a $22 million payday landed on Chief Executive Joe Gorder’s annual report of “America’s 100 Highest Paid CEOs,” the shareholder advocacy group As You Sow.
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In March 2021, France’s Total Oil Group sold the Prax Lindsay refinery in north Lincolnshire to Prax, a unit of a little-known Surrey-headquartered conglomerate called State Oil, which has been expanding rapidly. Sales increased almost tenfold between 2010 and 2020. The company’s controlling party, Winston Sosaipillai, who goes by his middle name Sanjeev Kumar, has almost no public profile.
The Foley refinery, the largest in the UK, supplies one sixth of all petrol to the garage forecourt and one fifth of all aviation fuel consumed in the country. Based in Hampshire, the company has been owned by Esso, ExxonMobil’s trading name, for almost 100 years. The Texas-headquartered multinational is valued at $363 billion and is the largest direct descendant of Standard Oil, founded by America’s first billionaire, John D. Rockefeller. Exxon posted its highest profit in seven years last year at $23 billion. The company paid CEO Darren Woods $23.6 million last year, up from $15.6 million in 2020. Woods also received a $3.1 million cash bonus. In May, subcontractors in Foley went on strike over pay.