How much do we really pay for a gallon of gas ?
http://www.iags.org/costofoil.html
An Overview of Gas Prices
Below is an overview of what makes up the retail price of a gallon of gasoline and what factors affect this price.
a. What makes up the retail price of a gallon of gasoline?
Cost of crude oil
50% of the cost of a gallon of gasoline directly reflects the cost that refiners pay to obtain the crude oil.
Refining costs and profits
28% of the cost of a gallon of gasoline reflects the costs to refine the crude oil making it useful to consumers.
Federal and state taxes
14% of the cost of a gallon of gasoline is made up of federal and state taxes, but does not include county or local taxes.
Distribution and marketing
8% of the cost of a gallon of gasoline is made up of distribution, marketing and retail dealer costs. Most gasoline is shipped by pipeline to consuming areas and then loaded into trucks for delivery at individual gas stations. The price reflects the retailer's purchase cost and operating costs associated with the service station. Additionally, the price can reflect the desirability of the station's location or the station owner's marketing strategies.
The break down of the cost of a gallon of gasoline above is based on the April 2007 average retail price of $2.85/gallon.
b. Why do gasoline prices fluctuate?
Gasoline prices can fluctuate for a variety of reasons including a change in seasons, natural disasters, local retail station competition, disruptions in the crude oil supply triggered by world events and/or refinery or pipeline outages.
Source: The statistics above are based on information on the Energy Information Administration's web site
What Do We Pay For in a Gallon of Regular Grade?
What are the components of the retail price of gasoline?
The cost to produce and deliver gasoline to consumers includes the cost of crude oil to refiners, refinery processing costs, marketing and distribution costs, and finally the retail station costs and taxes. The prices paid by consumers at the pump reflect these costs, as well as the profits (and sometimes losses) of refiners, marketers, distributors, and retail station owners.
In 2005 the price of crude oil averaged $50.23 per barrel, and crude oil accounted for about 53 percent of the cost of a gallon of regular grade gasoline. In comparison, the average price for crude oil in 2004 was $36.98 per barrel, and it composed 47 percent of the cost of a gallon of regular gasoline. The share of the retail price of regular grade gasoline that crude oil costs represent varies somewhat over time and among regions.
Federal, State, and local taxes are a large component of the retail price of gasoline. Taxes (not including county and local taxes) account for approximately 19 percent of the cost of a gallon of gasoline. Within this national average, Federal excise taxes are 18.4 cents per gallon and State excise taxes average about 21 cents per gallon.2 Also, eleven States levy additional State sales and other taxes, some of which are applied to the Federal and State excise taxes. Additional local county and city taxes can have a significant impact on the price of gasoline. Refining costs and profits comprise about 19 percent of the retail price of gasoline. This component varies from region to region due to the different formulations required in different parts of the country.
Distribution, marketing and retail dealer costs and profits combined make up 9 percent of the cost of a gallon of gasoline. From the refinery, most gasoline is shipped first by pipeline to terminals near consuming areas, then loaded into trucks for delivery to individual stations. Some retail outlets are owned and operated by refiners, while others are independent businesses that purchase gasoline for resale to the public. The price on the pump reflects both the retailer’s purchase cost for the product and the other costs of operating the service station. It also reflects local market conditions and factors, such as the desirability of the location and the marketing strategy of the owner.