Saturday, May 24, 2008
Here are the components that determine how much Americans pay for a gallon of gasoline:
CRUDE OIL • 72.7%
It is mostly determined by world supply and demand. Recently, commodity investments and political unrest in Nigeria, Iraq and Venezuela were also contributing factors. Oil futures have risen 75.6 percent since April 2007
TAXES • 11.5%
Federal taxes are 18.5 cents per gallon, and state taxes average 20.3 cents. Additional city and county taxes can have an impact in some locations.
REFINING • 10.0%
Refineries turn crude oil into gasoline and hold the nation’s stock. Output increases in summer months and inventories shrink, signifying greater demand. Since 2004, output has averaged 8.3 million barrels per day.
DISTRIBUTION • 5.8%
Most gas is shipped by pipeline to local terminals and then trucked to individual stations. The pump price is the retailer’s cost to purchase gas and run the station. It also reflects local markets and proximity to competition.
Source: U.S. Department of Energy