Refinery gate price
The wholesale cost of petrol, diesel, or other refined fuel as it leaves the refinery — before excise duty, VAT, distribution, and retail margins are added. It is the base of the pump price build-up and the part of the price most directly tied to crude oil markets.
Where it sits in the price stack
The retail pump price is built up from several layers. The refinery gate price is the first and largest in most countries:
| Component | What it covers | Who sets it |
|---|---|---|
| Refinery gate price | Crude oil cost + refining margin | Wholesale market / import parity |
| Distribution & logistics | Pipeline, terminal, road tanker to forecourt | Supply chain operators |
| Excise duty | Fixed tax per litre, volume-based | Government (varies widely) |
| Carbon tax / ETS cost | Price on CO₂ emissions | Government or ETS market |
| Retail margin | Forecourt operating costs + profit | Fuel retailers |
| VAT | % applied to all above | Government |
The breakdown above explains why fuel prices in high-tax countries respond more slowly to crude oil moves than in low-tax countries: a 10 % rise in crude costs raises the refinery gate price by roughly 10 %, but if the refinery gate component is only 40 % of the pump price, the pump price rise is just 4 %. For a fuller explanation of each layer, see our guide to what makes up the price at the pump.
How the refinery gate price is set
In liberalised markets, the refinery gate price is effectively set by the wholesale spot market for refined products. Major refiners price their output at the relevant regional benchmark — typically ARA (Amsterdam-Rotterdam-Antwerp) for NW Europe, the US Gulf Coast for the Americas, and Singapore for Asia — plus or minus a differential reflecting local logistics and product quality.
The European Commission's weekly oil bulletin publishes refinery gate price equivalents (before-tax prices) for all EU member states, making it one of the most comprehensive public sources for comparing the pre-tax component of European pump prices. The US EIA publishes weekly retail and wholesale (before-tax) prices for the US.
In regulated markets — where a government agency sets the retail price — the refinery gate component may be calculated from an import parity price formula or set by decree. South Africa, India, and several African countries use formula-based approaches that explicitly derive the refinery gate equivalent.
Crude cost and the crack spread
The refinery gate price has two sub-components: the crude oil cost and the refinery margin (crack spread). Crude typically represents 75–85 % of the refinery gate price in a normal market; the crack spread makes up the rest.
The crude oil input cost is driven primarily by Brent or WTI prices — see our Brent crude glossary entry for how international benchmarks work. The crack spread — the processing margin — reflects the difference between what finished products are worth and what the crude inputs cost:
Crack spreads are not fixed: they widen when product demand is strong or refinery capacity is tight, and narrow when new capacity comes on stream or demand weakens. The extraordinary diesel crack spread of 2022 (USD 60–70/bbl in Europe) resulted from Russian product export disruption combined with post-COVID demand recovery — a rare combination that temporarily made refinery margins as significant as crude costs in the pump price equation.
Refinery gate vs rack price vs spot
Three related pricing concepts are sometimes confused:
- Refinery gate price: The price at which refined product leaves the refinery's loading rack for bulk tanker or pipeline delivery. This is sometimes called the "ex-works" or "ex-refinery" price.
- Rack price (terminal rack price): The price at a downstream distribution terminal — a pipeline terminal or import terminal. The rack price equals the refinery gate price plus pipeline or barge transport costs to the terminal. Retailers and fleet operators typically buy at rack price.
- Spot (wholesale) price: The market price for a cargo of refined product at a major trading hub (ARA, Singapore, USGC). Spot prices are quoted by services like S&P Global Platts, Argus, and the EIA, and anchor both the refinery gate and rack price in competitive markets.
For the consumer, none of these distinctions matters directly — what matters is the final pump price. But understanding the refinery gate price helps explain why two countries with identical crude oil costs can have very different pump prices: the difference lies in taxes, distribution costs, and the degree to which each government has chosen to subsidise or tax the refinery gate component. For a detailed look at the tax side, see our entries on excise duty and VAT on fuel.
Frequently asked questions
What is the refinery gate price?
The refinery gate price is the wholesale cost of a refined fuel product as it leaves the refinery. It covers crude oil input costs, refinery operating expenses, and the refiner's margin (crack spread). Taxes, distribution, and retail margins are added on top to arrive at the consumer pump price.
How is the refinery gate price determined?
In competitive markets, it is set by the spot market for refined products — typically the ARA, USGC, or Singapore benchmark — adjusted for local logistics. The key driver is the crack spread: the difference between the value of the refined output and the cost of the crude input.
What share of the pump price is the refinery gate price?
In high-tax countries like the UK, Germany, or France, the refinery gate price typically represents 35–50 % of the pump price. In low-tax countries like the US, it is proportionally larger — typically 55–65 %.
What is the difference between refinery gate price and rack price?
The refinery gate price is the price at the refinery's loading rack. The rack price is the price at a downstream distribution terminal, which adds pipeline or barge transport from the refinery. In practice the terms are often used interchangeably, but strictly the rack price is slightly higher.