The crack spread is the difference between the price of crude oil and the price of the refined products — like gasoline and diesel — made from it. The name comes from the refining process itself: you literally “crack” crude oil molecules into lighter, more useful fuels.

Think of it like a baker buying wheat (crude oil) and selling bread (gasoline). The crack spread is the profit margin between the two — it covers the cost of running the refinery, energy, labour, and any profit the refiner keeps.

A higher crack spread means refiners are making more money per barrel — often because demand for gasoline is high or refinery capacity is tight. A lower crack spread means margins are compressed, which can happen when crude is expensive but demand for refined products is weak.

In this tool, we use a ~$20/barrel crack spread as a historical average. In reality, crack spreads fluctuate daily — they spiked above $60/bbl in 2022 during the post-pandemic supply crunch, and have traded as low as $5–$10/bbl during demand slumps. This is one reason why pump prices don’t always move in a straight line with crude oil.

You may notice this tool estimates a pump price that is somewhat lower than what you’re actually paying at the gas station. That gap is almost entirely explained by the crack spread.

This tool defaults to $20/bbl — the long-run historical average. But in practice, crack spreads in recent years have typically run between $25–$35/bbl, and occasionally higher. At a $28–$30 crack spread, the estimates align closely with real-world pump prices in most Canadian provinces and US states.

To match current conditions, simply slide the Refining Margin / Crack Spread slider upward until the estimated price matches what you’re seeing at your local station. That slider is the most honest way to account for the variability — hardcoding a single number would be wrong half the time as crack spreads move constantly.

The formula, tax rates, and exchange rate used in this tool are accurate. The only variable is the crack spread — and now you know exactly how to adjust it.