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Europe's gasoline-heavy refiners see profit in VW scandal

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* European gasoline demand expected to rise in coming years

* Coastal refineries with high gasoline output could benefit

* Change in EU diesel tax benefits could cost 16 billion euro

By Ron Bousso and Libby George

LONDON, Sept 25 (Reuters) - Some of Europe's struggling refineries could get an unexpected boost from Volkswagen (Other OTC: VLKAF - news) 's diesel emissions scandal if once-dominant gasoline regains its popularity.

Europe's refineries, many of which were built in the 1950s to support booming petrol demand, have been hit over the past 20 years by shrinking fuel demand and government incentives that skewed car sales toward diesel engines, which were seen as more efficient and emitted less carbon dioxide.

The rise of the diesel car, which accounted for 50 percent of car sales last year, has forced Europe to rely on diesel imports while its refineries struggled to find overseas markets for excess gasoline, which has put heavy pressure on profits and prompted a wave of plant closures in recent years.

Volkswagen's diesel emissions rigging scandal in the United States could reverse the fortunes of refineries with high gasoline output such as Valero's 220,000 barrel per day (bpd) Pembroke refinery in Wales, which has a 49.4 percent gasoline yield, and Exxon Mobil (Swiss: XOM.SW - news) 's 273,000 bpd Fawley...


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