| With extremely high gas prices straining consumers' | | | | with local and city taxes. |
| pockets in recent months, it is only natural for people to | | | | Refining costs: Refining crude oil makes up |
| wonder where all the money they pay at the pump | | | | approximately 13% of the price you pay at the gas |
| goes. Contrary to popular belief, the price of gas is not | | | | pump. |
| solely reliant on the price of crude oil. There are many | | | | Distribution and marketing: The costs of transporting |
| parties involved in setting the price of the gas you | | | | and marketing gas make up about 13% of the price of |
| purchase at the pump, and below is a quick | | | | gas. Crude oil must be transported from oil-producing |
| run-through on who they are and what portion of the | | | | countries to refineries, then the gasoline must be |
| entire price they require. | | | | transported to distribution points, and then lastly to the |
| Crude oil: Crude oil suppliers require the largest share | | | | gas stations that fill your tank. All of the costs of this |
| of the pie at about 45%. This share is determined by | | | | shipping and transportation are transferred to you, the |
| the oil-exporting nations and the Organization of the | | | | end consumer. Along with all this comes the marketing |
| Petroleum Exporting Countries (OPEC) in particular. | | | | that is involved in increasing a brand's awareness and |
| The price of one barrel of crude oil depends on how | | | | appeal, and these costs are also passed on to the |
| much crude oil these oil-exporting countries produce. | | | | consumer. |
| Sometimes gas prices rise despite the fact that there | | | | Gas station markups: There is no set percentage for |
| is enough crude oil to go around, and this is because of | | | | this number. Gas stations are at their own discretion as |
| a variety of other factors, one of which is the quality | | | | to how much to add on to the price in order to actually |
| of oil. Oil can be heavy or light, and sweet or sour. | | | | make a profit on the gas that they sell. Some stations |
| These words only describe the quality, not the taste, of | | | | (usually the larger ones) will only tack on a couple |
| oil. For example, light, sweet crude oil is cheaper and | | | | cents, while others will add a dime or even more. |
| easier to refine, but quantities of this kind of oil have | | | | Some states have laws that prevent stations from |
| been running lower recently. However, there is still a lot | | | | adding on less than a specified percentage over the |
| of heavy, sour oil, which means that refineries must | | | | price that the wholesaler sets. These markups are |
| spend more money refining it. | | | | also dependent on the area where the station is |
| Taxes: Federal and local taxes take about 31% of the | | | | located. Demographic information such as median |
| price you pay at the pump. Federal excise taxes | | | | income and population affect the decisions that |
| account for about 18 cents per gallon, while state | | | | stations make concerning the exact price they set for |
| excise taxes require about 20 cents per gallon. There | | | | the gasoline that they sell from their pumps. |
| might also be some additional state sales taxes, along | | | | |