US independent refiner Valero has idled gasoline-producing units and shut eight of its 14 ethanol plants to manage the abrupt collapse of fuel demand under global efforts to mitigate the Covid-19 pandemic.
The company has also reduced crude throughputs at most of its 3.2mn b/d of global refining capacity and cut corn processing at the remaining six ethanol plants, it said today in a filing to federal securities regulators. Valero operates the third-largest US refining system and one of the largest US ethanol capacities.
Demand for gasoline and jet fuel have cratered as communities worldwide shelter in place to limit the spread of the new coronavirus and reduce the strain on healthcare facilities.
The company did not identify where it idled gasoline-producing units or cut crude processing, although it has reported reduced rates and emissions from gasoline equipment at its Texas and Louisiana refineries.
The drop in gasoline demand has slashed demand for ethanol, a blendstock used in almost all US gasoline. Valero operates roughly 112,000 b/d of US ethanol capacity.
Valero's Diamond Green Diesel renewable diesel business, a joint venture with Darling Ingredients, has seen more stable demand, the company said. Continued agricultural activity and commercial shipping has supported more consistent diesel demand.
The refiner plans to defer refining and ethanol capital projects and withdrew its 2020 guidance.
Phillips 66, Par Petroleum, PBF Energy and HollyFrontier have all disclosed reducing overall refining rates by roughly 30pc. Crude processing at US refineries had fallen to 13.6mn b/d in the week ended 3 April, 18pc lower than the same week last year and the lowest level overall since February 2011.
