Where does all your gas money go?
May 4, 2012, 12:19 PM | Updated: Jun 4, 2012, 9:35 pm
Even with the recent drop, gas prices are still high,
with a gallon costing $4 in some areas of the country. But
where does all of that money go?
About 71 percent of what consumers pay for gasoline goes to
refineries, to buy oil, according to the American Petroleum
Institute. It takes one gallon of oil to make a gallon of
gas. Companies and traders buy and sell oil in commodities
markets, so it can be made into gasoline or kept as an
investment, according to Bankrate.com. This largely determines
the price of gas. Supply and demand also contribute to the
pricing of gas. Conflict in the Middle East can decrease
supply and drive up the cost of gas.
The rest of the price of a gallon of gas comes from taxes,
which accounts for 14 percent of the cost, and 15 percent
deals with refining, moving and selling it, according to the
API. When API did the study in February, the price of
gasoline was $3.58 per gallon. The per-gallon price broke
down to about $2.54 for crude oil costs, 50 cents went to
taxes and 54 cents went into refining, moving and retailing,
according to API.
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