Analysis of Gas Price (September 28, 2009)

I was thrown for a loop when one congressman suggested we raise the price of taxes on gas and wondered if people have given thought to the true profit centers of gas. Gas is a byproduct of oil. Crude Oil is sold in barrels. A barrel of crude of sold in contracts and you will hear about it every night in the news. There are 42 gallons of crude oil to a barrel (Oil is no longer transported in barrels but it's still the measuring stick). These 42 gallons are refined and what can be produced from this barrel is:19.5 Gallons Gasoline9.2 Gallons Fuel Oils4.1 Gallons Jet Fuel11.2 Gallons Misc (Kerosene, Road Oil, etc)* Yes there are 44 gallons because of chemical changes in the refinery process commonly know as "refinery gain"So if a barrel of Crude cost $40 a gallon, the base cost for one gallon would be 40/44 = 90.9 cents The second largest cost is the tax. 57.9 cents18.4 cents Federal Excise Tax39.5 cents IL Taxes (sales tax, excise, etc)The third largest cost is the cost of transportation. 15 cents The fourth largest cost is the cost of refining. 10 - 15 cents (12.5)The fifth Cost is the Retailer Cost: 5 cents The sixth Cost is the various profit market ups of these: 10 cents So if your gas station owner needed to look at resupplying his/her pumps on gas that is refined from a contract on a $40 barrel of crude he/she would put the price at (90.9 + 57.9 + 15 + 12.5 + 5 + 10 = 1.913) 1.913 a Gallon.48% goes back to the seller of the crude oil10% Federal Government21% State Government8% Transportation of the product7% Refining3% Gas Station Owner3% Misc. Profit If Congress wanted to help they would shift the tax from the consumer to the seller of the crude. The United States is the buyer of 25% of the crude oil market we should have some say in making the equation a little more fair.