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This Nerd Cheat Sheet outlines the calculation methodology used in the model of contributors to the German gasoline price.
The model is built using the following basic information:
- a general gasoline/naphtha pool recovery factor for the refining process;
- Brent crude benchmark price, on an FOB basis;
- German 95 RON E10 gasoline pump price;
- bioethanol market price;
- a general naphtha market price, represented by CIF NWE naphtha;
- USD/EUR exchange rates.
A mathematical model uses this information to estimate the Working Residual associated with the gasoline pool.
The nature of the calculation lends itself to implementation in Microsoft Excel.
The model represents the value chain between the modelled crude/feedstock input and the retail gasoline pump, while separately identifying the state burden.
In its simplest form:
Pump Price = State Burden + Modelled Raw-Material Cost + Working Residual
What is the Working Residual?
The Working Residual is not profit.
The model places the function of the gasoline pool within a defined frame. It does not attempt to describe all the mechanisms operating inside that frame.
Instead, it compares identified inputs with identified outputs.
The Working Residual therefore represents the combined effect of everything within the frame that has not been separately modelled.
It can consequently include effects associated with:
- refining and other production costs;
- logistics;
- trading;
- hedging;
- inventory positioning and valuation;
- short-term market risk;
- other feedstocks and blending components;
- and company profit.
The model does not isolate these effects individually.
In simplified conceptual form:
Profit ≈
Σ Product-Pool Working Residuals
− Production Costs
− Other Feedstocks
− Logistics / Trading Costs and Risks
This expression is conceptual only. It does not represent a complete accounting calculation for an individual refinery, oil company or petrochemical business operating in Germany.
Model Boundary
The calculated values are intended primarily for orientation, trend identification and order-of-magnitude comparison.
Detailed numerical accuracy is limited because the model principally represents:
- 95 RON E10 gasoline;
- Brent crude as the modelled crude basis;
- a generic gasoline-pool recovery rate;
- and a simplified representation of petrochemical naphtha demand.
The model should therefore not be interpreted as reproducing the detailed commercial accounts or operating configuration of an individual refinery.
Principal Assumptions
1. July Snapshot Basis
The model uses July monthly-average values for each reference year.
The principal annual snapshot inputs are:
a. Brent crude benchmark price, FOB basis;
b. German 95 RON E10 pump price;
and, together with the remaining model inputs, these are used to estimate:
c. the Gasoline Pool Working Residual.
Values between annual July observations are not independently calculated.
Where a time-weighted average is required, linear change between the July observations is assumed.
2. E10 as the Gasoline-Pool Control Product
The German gasoline pool is valued using 95 RON E10 as an E10-equivalent control product.
The actual German gasoline pool contains products and components with different specifications and values.
Using a single reference product therefore limits the detailed accuracy of the calculated Gasoline Pool Value and consequently the estimated Working Residual.
3. Petrochemical Naphtha
A generalised naphtha market reference is used to value the portion of the modelled German gasoline/naphtha pool directed towards petrochemical consumption.
This simplification limits the accuracy of the calculated Naphtha Working Residual.
Scenarios 2 and 3 use assumed levels of petrochemical naphtha demand:
- Scenario 2: 20 Mt/y
- Scenario 3: 17.5 Mt/y
These values are not intended to identify hard maximum and minimum operating limits for German refinery or petrochemical facilities.
Their purpose is to test the sensitivity of the calculated Working Residual to product demand outside German road-gasoline consumption.
German Refining Capacity — Orientation
An approximate list of principal refinery facilities considered for orientation is:
| Region | Refinery | Approx. crude capacity, Mt/y |
| Schleswig-Holstein | Heide / Hemmingstedt | 4.2 |
| Hamburg | Holborn | 5.15 |
| Lower Saxony | BP Lingen | 4.7 |
| Brandenburg | PCK Schwedt | 11.48 |
| Saxony-Anhalt | TotalEnergies Leuna / Spergau | 12.0 |
| North Rhine-Westphalia | BP / Ruhr Oel Gelsenkirchen | 12.8 |
| North Rhine-Westphalia | Shell Rheinland – Godorf | 9.3 |
| North Rhine-Westphalia | Shell Rheinland – Wesseling | 7.3 |
| Baden-Württemberg | MiRO Karlsruhe | 14.9 |
| Bavaria | Gunvor Ingolstadt | 5.0 |
| Bavaria | Bayernoil Neustadt / Vohburg | 10.3 |
| Bavaria | OMV Burghausen | 3.7 |
The combined nominal crude-refining capacity represented by these facilities is approximately 101 million tonnes per year.
4. Generalised Refinery Yield
For orientation, the model uses the following simplified assumptions:
- 1 barrel of crude contains 42 US gallons;
- assumed Brent crude density: 0.833 kg/litre;
- refinery product swell increases approximately 42 gallons of crude to 45 gallons of finished products;
- approximately 19 gallons of gasoline-pool material are produced per 42-gallon crude barrel;
- assumed E10 density: 0.75 kg/litre.
These values provide a generalised conversion between crude throughput and potential gasoline-pool production.
Where did the Windfall Fall?
📖 Supporting Sections
- Who’s Cooking the Books with Gasoline? 18.09.2026
- Picky and Choosy? (Forthcoming)
- The Grass is Greener (Forthcoming)
- Supply and Demand (Forthcomming)
- When the Wind Blows TBD (Forthcoming)
- Good Intentions and the Shifting of Influence (Forthcoming)
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