Extra!: Gas prices

[Buffmaster]

Extra!: Gas prices


May 14, 2007

(CNN Student News) -- The price that your parents pay to fill up the family car is rising. Ever stop to think about what's behind the price at the pump? Here's a look at where the money goes when you buy a gallon of regular gasoline. (The percentages cited below may vary by month. This data is as of March 2007.)

Crude oil: Currently, this is the biggest portion of the consumer's cost of gas. About 52 percent of what you pay for each gallon goes to crude oil suppliers. This is determined largely by the Organization of Petroleum Exporting Countries, or OPEC. The amount of crude oil produced by OPEC determines the price of a barrel of oil.

Taxes: The U.S. government taxes gasoline, as do many state and local governments. On average, these taxes collectively account for 15 percent of the consumer's cost of gas per gallon. Gas prices vary from state to state primarily because of variances in taxes. In Europe, gas taxes are much higher, and so is the price of gasoline.

Refining: The cost of refining crude oil accounts for about 24 percent of the cost of a gallon of gas. Crude oil, or petroleum, must go through a refining process to turn it into useful products including gasoline. The stages of this process vary with the grade of gasoline or other kinds of products being created.

Distribution and marketing: Crude oil is transported to refineries, then its refined product, gasoline, is shipped from the refineries to distribution points and then to gas stations. Transportation costs are part of the price of gas. Oil companies that make gasoline are competing for consumers' dollars, so they market their brands to consumers. The companies promote, or advertise, their gasoline by advertising. These advertising and distribution costs together account for about 9 percent of the price of a gallon of gas.

Other factors: The elements listed above all factor into the price of gasoline, but there are other contributing factors. One is seasonal demand. In warmer months, when families tend to travel more, the price of gasoline usually increases, because there is more of a demand for it. Geography can have an impact on the price of gasoline your family pays versus that your cousin's family pays in another part of the U.S. In general, the further you are from oil refineries, the higher price you'll pay for gasoline due to higher distribution costs. Competition among gas stations often has an impact on price. Have you ever seen three or four gas stations located near the same intersection? What might the others do if one station lowers its gas prices? Service stations, like other businesses, have to make a profit to survive, so they set their prices based on all the factors we mentioned plus whatever profit the market (and the law) will allow.

(Sources: Energy Information Administration, U.S. Dept of Energy, CNNMoney.com and OPEC)

[gmsnctry]

They forgot

Retarded deregulation

Not enough refineries in operation in some states

And phantom crises when a hurricane comes a blowin' near Nawlins

[Buffmaster]

"Not enough refineries in operation in some states"

You can blame the Dems on this one.

[AYHJA]

I think too BM, that I read maybe from something you posted, that not only is the price of gas going up, but these oil companies are turning record profits...I think that's what has pissed me off about the whole thing...

[Buffmaster]

Your right, it's all BS.

Why would oil that was bought and refined nine months ago would move up in price with current levels is beyond me.

[deepdiver32073]

The number of refineries operating is a function of the oil companies and their policies. I do believe that the great majority of the oil companies' presidents, CEOs, COOs, CFOs, etc. are Republicans, not Dems. Their continued support of the Republican Party and the President (and let's not forget the Vice President) are the reason much of the deregulation has occurred and gas prices and profits continue to rise.

[raum]

um, I actually think there is far *more* regulation of the oil industry with the weekly surveys. It is also considerably easier to look at the incremental monthly factors driving price.

What is driving profits up is shareholder expectations, not CEO's. CEO's are beholden to shareholders.

http://www.eia.doe.gov/oil_gas/petroleu ... forms.html

Here is a list of the reporting requirements of the "deregulated" oil market participants. I assure you nothing is deregulated, simply because it is traded at a realtime and day-ahead FIMI index. Operational costs are WAY higher, and commercial operations are all driven by the Gas Daily index, which is set by the market, not a specific company.

What you might see is diversity is driving profits higher, as oil companies are disposing of less and less raw product, so disposal costs are replaced by financial gains for the product that USED TO BE WASTE. also, as more oil driven consumers are turning to higher quality products, they drive prices higher.

[Epiphany]

All I have to say is http://www.gasbuddy.com