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Refining is the process of reducing the impurities in a substance. You can't turn crude oil into gasoline without first refining it. Refining is nowadays most commonly associated with the processing of petroleum products such as oil and gas, but it also applies to precious metals, especially those used in jewelry. Sugar is another substance that undergoes refining, which makes it less grainy and more consistent.
To be useful, crude oil must be refined into consumable products like gasoline, diesel, asphalt, LPG, jet fuel and a wide range of other products. Refining capacity is the given capacity of total charge input which a refinery or set of refineries are built to handle before they convert it into other consumable products. Crude oil may be just a fraction, let's say 90% of the total charge input that a refinery receives.