Doomsday was at our door for much higher diesel fuel prices and gas prices with several refinery closure that we’re do to happen. It looks like things might be saved as Delta Airline in a very unusual move has bought the Trainer terminal from Phillips 66.
This means diesel fuel and gas will flow through this refinery. Delta bought it to have jet fuel flow through the terminal. They believe they are buying a billion dollars worth of equipment for $150 million.
With the ability to produce their own jet fuel, they feel this will be a competitive for them in the marketplace because they can hedge their #1 expense jet fuel better. Providing Delta with a fuel saving could save them over $300 million dollars a year in fueling expense.
Clearly, Delta feels their fuel management programs can run and integrate this into their network. This move if successful could lead into other airlines buying refineries to achieve lower cost fuel and fuel saving for their highest expense jet fuel.
In other Northeast refinery news Sunoco has been sold to Energy Transfer Partners for $5.3 billion dollars. This might set up a move for Carlyle Group to have a joint venture on running the 330,000 barrel a day refinery in Philadelphia. Carlyle Group is a private equity group that would run the refinery if the deals happens.
Clearly, this is all positive news for fleet fuels and jet fuel for the Northeast that just a very short time ago, looked bleak. Always remember that when things look better in the diesel fuel market they are probably going to make a turn in the other direction. Don’t take your eye off of trying to achieve fuel saving. Fuel management is the way to go today.
Gain instant access to the ebook!