Gas Prices: Where Does the Money Go ?
March 15th, 2006 by admin
A breakdown of where your money goes when you buy gas
Gas prices are a hot topic here at AutoWarranties.com, but I want to make sure everyone knows where his or her money is going. That’s what being a smart investor is all about, right? And, with the fluctuation of gas prices, it’s only natural for people to wonder in amazement about the rapid change in prices from day to day.
Crude oil: Crude oil suppliers require the largest share of the pie at about 45%. This share is determined by the oil-exporting nations and the Organization of the Petroleum Exporting Countries (OPEC) in particular. The price of one barrel of crude oil depends on how much crude oil these oil-exporting countries produce.
Taxes: Federal and local taxes take about 31% of the price you pay at the pump. Federal excise taxes account for about 18 cents per gallon, while state excise taxes require about 20 cents per gallon.
Refining costs: Refining crude oil makes up approximately 13% of the price you pay at the gas pump.
Distribution and marketing: The costs of transporting and marketing gas make up about 13% of the price of gas. Crude oil must be transported from oil-producing countries to refineries, then the gasoline must be transported to distribution points, and then lastly to the gas stations that fill your tank.
Gas station markups: There is no set percentage for this number. Gas stations are at their own discretion as to how much to add on to the price in order to actually make a profit on the gas that they sell. Some stations (usually the larger ones) will only tack on a couple cents, while others will add a dime or even more.
Taxes: Federal and local taxes take about 31% of the price you pay at the pump. Federal excise taxes account for about 18 cents per gallon, while state excise taxes require about 20 cents per gallon.
Refining costs: Refining crude oil makes up approximately 13% of the price you pay at the gas pump.
Distribution and marketing: The costs of transporting and marketing gas make up about 13% of the price of gas. Crude oil must be transported from oil-producing countries to refineries, then the gasoline must be transported to distribution points, and then lastly to the gas stations that fill your tank.
Gas station markups: There is no set percentage for this number. Gas stations are at their own discretion as to how much to add on to the price in order to actually make a profit on the gas that they sell. Some stations (usually the larger ones) will only tack on a couple cents, while others will add a dime or even more.
There you go! A simple breakdown of where each penny goes when you buy gasoline.
See Also
- AutoWarranties.com
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Fluctuation of gas prices
Posted on Wednesday, March 15th, 2006 at 6:33 am
In Auto Warranty