Oil Refinery Break-Even Analysis: $134M Monthly Revenue Target

Fixed costs $765K/mo Base overhead

Contribution margin 85% After variable costs

Break-even revenue $903K/mo Monthly target

Break-even timing Month 1 Launch month

Break-even calculator

Use this calculator to test monthly refinery revenue, variable costs, and fixed overhead against break-even.

Lean Base Full

Monthly revenue Use the monthly sales value from gasoline, diesel, jet fuel, naphtha, and LPG. $ Lower sales Higher sales Variable expenses Use the direct refinery costs that rise with output, including feedstock, processing, logistics, and compliance. $ Lower costs Higher costs

Money available to cover fixed costs $167,188,496 $204,737,500 revenue - $37,549,004 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly cost base the refinery must cover before profit, including site overhead and plant payroll. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which refinery expenses are fixed, and which move with sales?

Cost classification

Break-even is only useful if fixed costs stay in the numerator and volume-linked costs reduce contribution margin. In this model, rent and insurance sit fixed, while crude feedstock, logistics, compliance fees, and energy move with throughput or revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Lease & Site Rent	Fixed	Include $250,000 per month in fixed overhead from Month 1 through Month 60.	Flexing site rent with production volume.
Refinery Insurance Premiums	Fixed	Include $150,000 per month in the fixed-cost base for break-even.	Spreading insurance per unit and hiding fixed burden.
Crude Oil Feedstock	Variable	Apply per unit: $5.00 gasoline, $6.00 diesel, $5.50 jet fuel, $4.50 naphtha, and $3.50 LPG.	Treating crude purchases as fixed procurement.
Processing Additives	Variable	Apply per unit by product, from $0.35 for LPG to $0.60 for diesel.	Budgeting additives as a flat plant allowance.
Transportation & Logistics	Variable	Reduce contribution margin by 3.0% of revenue in the first year, falling to 2.0% by the fifth year.	Using one flat monthly freight estimate.
Environmental Compliance Fees	Variable	Reduce contribution margin by 1.0% of revenue in the first year, then 0.8% in later years.	Burying volume-linked compliance fees in overhead.
Utilities for Processing and Energy	Semi-variable	Split base service needs from throughput use; model product-level processing utilities and per-unit energy as volume rises.	Treating throughput-linked energy as fixed.
Maintenance Technicians	Semi-fixed	Model staffing in steps: 15 FTE in the first year, 17 in the second year, and 20 from the third year onward.	Assuming maintenance labor moves smoothly per unit.

How does break-even change from a lean refinery run to base and full capacity?

Scenario table

Contribution margin means revenue left after variable costs. As throughput rises, that spread improves, so break-even gets easier to clear. All three cases stay well above break-even; the main risk is outage, feedstock disruption, or a price reset.

Planning assumptions only; results can shift if operations slip, feedstock tightens, or product prices reset.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Year 1 lean refinery run	$150.8M	$29.3M	$4.6M	80.6%	$117.0M	Still far above break-even; the cushion is the smallest here.
Year 3 base refinery run	$204.7M	$37.5M	$5.6M	81.7%	$161.7M	Well above break-even, with more room than the lean case.
Year 5 full-capacity refinery run	$241.9M	$42.3M	$5.6M	82.5%	$193.9M	Strong cushion; break-even risk is low at full output.

What breaks the refinery break-even plan if prices fall or costs spike?

Stress test

The base plan clears break-even by a wide margin, but that buffer shrinks fast if product prices slip, fixed costs creep up, or crude-linked margin pressure hits at the same time.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$134M	$1.37B cushion	The base case stays well above break-even.
Revenue shortfall	Monthly revenue falls 10% from the base plan.	$134M	$1.22B cushion	Lower pricing cuts the buffer quickly.
Fixed-cost pressure	Fixed overhead rises by $100k per month.	$134.1M	$1.37B cushion	Fixed creep barely moves break-even, but it stacks.
Margin pressure	Contribution margin drops 1 percentage point.	$135.8M	$1.37B cushion	Crude spikes or higher compliance spend push break-even up.
Combined pressure	Revenue falls 10%, fixed overhead rises $100k, and margin drops 1 point.	$135.8M	$1.22B cushion	Outages and cost inflation together shrink the buffer most.

What should you verify before signing the site lease and funding the first refinery build?

Founder checklist

The model only works if permits, crude access, utilities, tankage, and safety systems are live before you sign the $250k/month lease. Month 1 minimum cash is $14.655M, so don’t hire or buy inventory until the first build phase is fully funded.

1Demand proof$1.81B

Verify the opening-year product slate really moves: 10.0M gasoline, 8.0M diesel, 4.0M jet fuel, 2.0M naphtha, and 1.0M LPG.

2Site control$250K/mo

Confirm you can control the site before the monthly lease starts, because rent is a heavy fixed drag if crude, utilities, and tank access are not locked first.

3Margin spread~85%

Check that the blended spread stays near plan after crude, additives, energy, labor, logistics, and environmental fees, because a few points of cost creep can crush break-even room.

4Payroll ramp$3.79M/yr

Verify the first-year team is funded at 38 FTE before benefits and overtime, or hiring ahead of throughput will push monthly burn up faster than output.

5Cash cushion$14.655M

Hold at least the modeled Month 1 minimum cash, or the build can stall before the plant stabilizes and starts covering its own operating load.

6Launch gate$56.5M

Sequence the capex plan so the crude unit, hydrocracking, tank farm, pipeline, wastewater, fire systems, lab, and admin work do not outrun each other.