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There are many things involved when we try to figure out why gasoline costs as much as it does. It is not just the end product we are paying for.
1. We Pay The Cost Of The Crude Oil .
2. The Refining Process Costs
3. The Marketing Costs
4. The Distribution Costs
5. The Retail Gas Station Mark Ups
6. The Taxes
The cost of a barrel of crude oil is somewhere from 50% to 55% of the final pump cost per gallon of gasoline.
We pay federal, state and local taxes on each gallon of gas and that accounts for approximately 20% of the gallon we pay for at the gas station.
The cost of refining the gasoline adds another 20% of the cost.
Finally, the distribution and resale profits give us the final 10% of the equation.
On any given day, depending on the cost of a barrel of oil, or transportation fees, or extra taxes we can add or subtract 1% or so from any of these numbers. None of them are set in stone, and can vary a bit now and again.
Here are some interesting facts about our gas that most people don't know.
A retail gas station makes between 1 and 5 cents a gallon of gas. What you pay at the pumps is only about 20% more than they pay. The rest of the added costs are taxes. They make their profit on quantity.
One barrel of crude oil makes about 19.5 gallons of gasoline, it also makes some heating fuel, jet fuel and a few other products like kerosene, asphalt, and 8 to 9 gallons of fuel oil, 3 or 4 gallons of jet fuel, and 11 gallons of other products, including motor oils and lubricants, kerosene and asphalt.
Some of the products made from crude oil are: bubble gum, tires, crayons, tape, ammonia, eyeglasses, deodorants, movie film, volley balls and tape.