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Nelson-Farrar Quarterly Costimating How indexes have risen

April 1, 1996

Gary Farrar Contributing Editor Nelson-Farrar Cost Indexes, 1994 and 1995 [47612 bytes] Itemized Refining Cost Indexes [68184 bytes] Itemized Refining Cost Indexes [154,835 bytes] Continuing a trend starting in 1983, the Nelson-Farrar refinery construction index rose slowly from 1,335.8 in January 1994, to 1,406.5 in December 1995. The labor component of the index rose at a more rapid rate than did the material component. The labor index rose from 1,645.3 to 1,733.8 over the 2-year period,

Gary Farrar
Contributing Editor

Nelson-Farrar Cost Indexes, 1994 and 1995 [47612 bytes]
Itemized Refining Cost Indexes [68184 bytes]
Itemized Refining Cost Indexes [154,835 bytes]

Continuing a trend starting in 1983, the Nelson-Farrar refinery construction index rose slowly from 1,335.8 in January 1994, to 1,406.5 in December 1995. The labor component of the index rose at a more rapid rate than did the material component.

The labor index rose from 1,645.3 to 1,733.8 over the 2-year period, while the materials index rose 55.1 points, from 871.0 to 926.1.

The miscellaneous equipment index rose 48.5 points in the 2-year comparison. The category includes pumps and compressors, electrical equipment, heat exchangers, instruments, and engines. They are thus manufactured items, and their costs are a measure of manufacturing efficiency.

The Nelson-Farrar refinery operations index increased 9.7 points from 400.9 to 410.6 in the 1994-1995 period. The process unit index also showed an increase over this period, increasing from 415.2 to 446.6.

These two indexes varied somewhat randomly, showing month-to-month cost variations without any masking effect. Changes in the cost of refinery fuel accounted for much of the oscillation. Continuing increases in refinery operating efficiency helped stabilize values of both indexes.