With exceptionally high gas prices straining consumers’ pockets in recent months, it is just natural for individuals to question where all the cash they pay at the pump goes. Contrary to common belief, the rate of gas is not entirely dependent on the cost of petroleum. There are lots of parties involved in setting the price of the gas you acquire at the pump, and below is a quick rundown on who they are and what part of the whole price they need.
-Crude oil: Crude oil suppliers require the biggest share of the pie at about 45%. The rate of one barrel of unrefined oil depends on how much unrefined oil these oil-exporting nations produce. In some cases gas prices increase despite the fact that there is adequate unrefined oil to go around, and this is due to the fact that of a variety of other elements, one of which is the quality of oil.
-Taxes: Federal and regional taxes take about 31% of the price you pay at the pump. Federal excise taxes represent about 18 cents per gallon, while state import tax taxes require about 20 cents per gallon. There may also be some extra state sales taxes, in addition to regional and city taxes.
-Refining costs: Refining crude oil makes up approximately 13% of the price you pay at the gas pump.
-Distribution and marketing: The expenses of transporting and marketing gas comprise about 13% of the rate of gas. Petroleum needs to be transferred from oil-producing nations to refineries, then the fuel must be carried to circulation points, and then lastly to the gas stations that fill your tank. All of the costs of this shipping and transportation are transferred to you, completion customer. In addition to all this comes the marketing that is involved in increasing a brand’s awareness and appeal, and these expenses are also handed down to the customer.
-Gas station markups: There is no set portion for this number. Gas stations are at their own discretion as to how much to include on to the rate in order to really make a revenue on the gas that they sell. Demographic info such as typical income and population impact the decisions that stations make concerning the exact price they set for the fuel that they sell from their pumps.
Contrary to popular belief, the rate of gas is not exclusively reliant on the cost of unrefined oil. Often gas costs increase in spite of the reality that there is enough crude oil to go around, and this is since of a variety of other factors, one of which is the quality of oil.-Distribution and marketing: The costs of transferring and marketing gas make up about 13% of the cost of gas. Gas stations are at their own discretion as to how much to include on to the cost in order to in fact make a revenue on the gas that they offer.