Sunday, June 29, 2008

Breakdown of cost of gasoline

Here is a breakdown of the cost of a gallon of gasoline.
If crude oil is $140 per barrel, the cost of the gasoline from that barrel is $71.96.
A barrel of oil is 42 gallons. Of that 21.5 gals of gasoline can be refined from the 42 gals.
That come to $3.34 per gal. for cost of oil.

Here is the breakdown from California on June 23 2008, to produce one gal of gasoline.

3.22 Cost of crude
0.18 Federal tax
0.34 State and local taxes
0.18 State exise tax
0.12 marketing and distribution
0.53 Refining cost and profit

4.59 Retail price

The taxes vary from state to state and the additives vary which is why California is higher.
The costs associated with refining and terminal operations, crude oil processing, oxygenate additives, product shipment and storage, oil spill fees, depreciation, purchases of gasoline to cover refinery shortages, brand advertising, and profits.

As you can see the main cost of a gal. of gas is the cost of the crude, $3.22. The second highest part is $.70 per gal tax. that puts the cost at $3.92 per gal before the oil company even gets the oil to the refinery.

The way to pay less is very obviously to lower the cost of the crude.
The cost of the crude oil in Jan 2007 was $62 per barrel. Just changing that has raised the price of gasoline from $1.42 per gal to $3.22, in 18 months.

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