- 159 liters of gasoline are produced per crude oil barrel.
- Refining and distribution add about 50% to crude cost.
- Excise and VAT are applied via a fixed calculation.
- Pump price lags 7–14 days behind barrel quotes.
Understanding how crude oil pricing influences gasoline at the pump is a constant concern for drivers. By applying a precise mathematical formula, we can determine the direct relationship between international barrel quotes and the final price paid for fuel.
In Romania, the Brent or Urals benchmark is used, but they are now close in price to WTI. This variability in references can slightly affect the final calculations.
Main components of the final price
Cost of the raw material and conversion
The first step in calculating the gasoline price is to convert the barrel quote into a price per liter. A standard barrel of crude oil yields 159 liters of gasoline after refinery processing. Thus, for a barrel price of 105 USD:
- Cost per liter: 105 USD ÷ 159 = 0.66 USD/liter
- Equivalent in RON: approximately 2.97 RON/liter (based on the March 2022 rate)
Refining and distribution costs
The refining and distribution process to stations adds additional costs. These are estimated at about 50% of the raw material cost, representing:
- Refining and distribution markup: 1.49 RON/liter
- Total cost up to this stage: 4.46 RON/liter
Excise and government taxes
The Romanian government applies a specific excise for gasoline, which in 2022 was:
- Excise: 1.892 RON per 1,000 liters
- Equivalent per liter: 1.89 RON/liter
VAT application
The 19% value-added tax applies to the entire sum calculated above:
- VAT factor: 1.19
Complete calculation formula
Mathematically, the formula to determine the final price is:
[(Barrel price ÷ 159 × 4.5) × 1.5 + 1.89 RON] × 1.19 = Pump price
For the example with a barrel price of 105 USD in March 2022:
- Final price calculated: 7.56 RON/liter
- Practical range: 7.4 – 7.6 RON/liter
Price scenarios for different quotes
Barrel at 125 USD Applying the formula for a higher quote:
- Estimated pump price: approximately 8.5 RON/liter
The 10 RON per liter threshold For gasoline to reach 10 RON per liter, the barrel quote would need to be approximately:
- 160 USD per barrel
This analysis demonstrates the direct sensitivity of fuel price to fluctuations in international crude oil quotes.
Factors influencing the calculation
Variability among networks
Gas stations apply different price ranges depending on:
- Their own commercial strategies
- Specific operating costs
- Market positioning
Response time to changes
The 7–14 day lag between the barrel quote and the price reflection is due to:
- Transportation and storage times
- Station supply cycles
- Pricing policies of the companies
Considerations for future estimates
This formula provides a solid basis for estimating future gasoline prices, allowing drivers to anticipate cost changes based on the evolution of international oil markets. It is important to bear in mind that fiscal factors and operating costs can vary over time, affecting long-term calculation accuracy.
