Industry Analysis & Industry Trends
Petroleum refiners had a lot to worry about as soaring crude oil prices made operating conditions volatile and uncertain over the past five years. High oil prices will artificially increase revenue of the Petroleum Refining industry, which is estimated to grow at an annualised 1.2% over the five years through 2012-13 to reach £41.4 billion.
Despite revenue growth, the industry endured poor conditions. Many refiners looked to sell their businesses due to poor profit margins. The demand for petroleum products declined over the past five years due to high prices, improved fuel efficiency and environmental concerns. The recession added to the woes of refiners. Petroleum products output is estimated to decline by an annualised 2.5% over the five years through 2011-12... purchase to read more
Industry Report - Industry Investment Chapter
The industry has a high level of capital intensity. The industry invests approximately £0.97 on new capital for every £1.00 spend on labour. This is not surprising, as refineries carry very high fixed costs in the form of infrastructure and expensive equipment. Besides these costs, oil refineries also need to carry out ongoing investment to improve efficiency and meet any new government standards.
Having said that, labour is also important in this industry. Labour costs are not high relative to capital costs; however, skilled employees are needed to operate refinery machinery. The Petroleum Refining industry is facing a shortage of skilled labour, which pushed up the average industry wage prior to the recession... purchase to read more