The price of gasoline

Average gasoline prices have risen by 17 cents in July.  And, given yesterday’s fire at a Chevron refinery in California, prices will rise even further.  Most will blame “big oil” (don’t you just love it that “someone” must be blamed for everything in this country).  Before you do so, read on.

Crude oil costs make up about 76% of the cost of gasoline, according to U.S. Energy Information Administration (EIA).  Thus $2.66 of a $3.50 gallon of gasoline is set before the oil is even refined.

Where does the rest of your money go?

Not to “big oil”.

As of January, 2012, the EIA found that refining was responsible for 6% of the cost of gasoline.

Yes, “big oil” refines the oil, but that 6%  doesn’t go into big oil’s pocket, it goes to pay for the cost of running the refineries, and the salaries of those who work there.

Another 6% goes to distribution and marketing.

That portion  of the cost includes the shipping and transportation of the gasoline, a markup to cover retailers’  expenses and any advertising created to appeal to customers.

Retailers’ expenses pay for your local gas station, its employees, its mortgage, and its property taxes.  Not to “big oil”.

And then,

The remaining 12%–or almost 50 cents per gallon today–goes directly to federal, state and local governments in an array of sales and excise taxes.  The federal tax is 18.4 cents on every gallon of gasoline sold in America.  State gas-tax rates vary from a low of eight cents per gallon in Alaska to a jarring 49 cents per gallon in New York.  Other states where it is steep to fill up include California and Connecticut–each with 48.6 cent-per-gallon gas taxes..

And “evil” big oil.

 Exxon, for example, made only seven cents per gallon of gasoline in 2011.

So, the next time you fill up your tank in Connecticut, say, remember that 67 cents of the cost of every gallon goes to your state and federal government in taxes, while only 7 cents of the cost of every gallon goes to “big oil”.

 

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SoundOffSister

The Sound Off Sister was an Assistant United States Attorney for the Southern District of Florida, and special trial attorney for the Department of Justice, Criminal Division; a partner in the Florida law firm of Shutts & Bowen, and an adjunct professor at the University of Miami, School of Law. The Sound Off Sister offers frequent commentary concerning legislation making its way through Congress, including the health reform legislation passed in early 2010.

20 Comments

  1. JBS on August 8, 2012 at 6:17 pm

    So, $2.66 of a $3.50 gallon of gasoline goes to the crude producer? That’s 76%! I’m sure I wouldn’t want to produce crude. They probably earned it. But, How much of that $2.66 goes to the government to pay for taxes, regulations, compliance, etc. on their end? And, baksheesh?
    ?
    Actually, from a straight investment standpoint, investing in health care or financials pays better than investing in “big oil.”
    ?
    Still, it bothers me more than a little that a few years ago gasoline was $0.99 per gallon and . . . I know it! It’s those dang democrats!



  2. Plainvillian on August 8, 2012 at 7:37 pm

    sooooo…. “Big Oil” makes $.07 on an investment of $2.66; that’s a whopping 2.6% profit.? Taxes are $.50 per gallon and that’s not exploitative but okay because it all goes for infrastructure, right?? Then why are all the roads and bridges not in pristine condition??



    • JBS on August 8, 2012 at 8:14 pm

      Considering the amount of money that we pay in taxes, all of the union people should be multi-millionaires!



    • Dimsdale on August 9, 2012 at 10:54 pm

      Some are.



  3. dairyair on August 8, 2012 at 8:51 pm

    Come on, Dannel P. (Puppet) Malloy–only a half cent more per gallon AND WE WILL BE AT THE TOP! WHOO-WHO!
    SOS, thanks for bringing this topic up. People need to know that the gubmint gets more money/gallon than the oil companies, and they’ve done nothing but throw up roadblocks to drilling and refining.



  4. Anybody but Obama on August 8, 2012 at 8:59 pm


  5. sammy22 on August 8, 2012 at 10:14 pm

    In fairness (ha-ha), I don’t see the oil companies complaining about making 7 cents/gal of gas. Or feeling sorry for us that about 50 cents/gal are in taxes. Perhaps everybody should move to Alaska where the gas tax is low, and everybody gets a royalty from oil. There are some downsides though..



    • Dimsdale on August 9, 2012 at 11:55 am

      No, the only people you see complaining about the $0.07 the oil companies make on a gallon of fuel are the liberal politicians making the $0.50 per gallon for no effort whatsoever!? They bemoan the “billions in WINDFALL profits” while making more than six times the money (your figures).?? Talk about a windfall!? And I am pretty sure that most of them don’t know what the definition of “profit” (or “fair”) is anyway.
      ?
      It is the very essence of hypocrisy.? Or being a liberal Democrat.



  6. sammy22 on August 9, 2012 at 12:02 pm

    Good thing it’s only the liberal politicians “making” money on gas. The non-liberal politicians are victims, not enablers.



    • Dimsdale on August 9, 2012 at 1:07 pm

      Regardless, it is only the liberal politicians complaining, no?? And, in fact, wanting even more.



  7. sammy22 on August 9, 2012 at 5:28 pm

    EVERYBODY is complaining about the price of gas: liberals, conservatives and even atheists.



    • Dimsdale on August 9, 2012 at 5:57 pm

      But it is the liberals, either directly, as in CT, or indirectly, as in the regime’s failed energy policies, that are raising the prices. ? And they don’t hesitate to come up here to MA to buy it more cheaply.



  8. sammy22 on August 9, 2012 at 10:59 pm

    Try as you might otherwise, the price of oil is set at the at the world market level. Some Middle East governments are subsidizing a lower price at the gas pump, but you would not like that, would you? And please don’t bring up the “drill, drill, drill” jingle that is not going to get the price down. Sorry, but MA is too far for me to travel to get gas.



    • Dimsdale on August 10, 2012 at 3:06 pm

      Are the taxes that are heaped onto the price of oil set at the world market?? No, they aren’t.? Is a lack of taxes a subsidy?? Apparently it is, to you.
      ?
      Come back to the topic, sammy.? We are talking about the net profit that oil companies make, which the liberals constantly and loudly whine about, and which pales in comparison to the windfall the government makes off a gallon of fuel.
      ?
      I am glad to see that you pay the CT fuel taxes that your elected reps have bequeathed to you.? And by the way, are you admitting that you would drive to MA if it were more convenient?? 😉



  9. Lynn on August 10, 2012 at 7:59 am

    Just another way to keep the “little people” in their place.



  10. sammy22 on August 10, 2012 at 11:39 am

    Is it the “little people” or the “little whiners”?



    • Tim-in-Alabama on August 10, 2012 at 1:28 pm

      Victim and whiner aren’t working. Come up with some new material.



  11. JBS on August 10, 2012 at 2:29 pm

    Let’s remember that the point of this Regime’s energy is to push gasoline prices to over $5/gallon!
    ?
    The Secretary of Energy, Steven Chu,? stated that the goal of the Obama syndicate was to push gasoline prices to European levels. (Pushing people into tiny electric cars) That was said at a time when gas prices were headed to $5/gallon. He had to walk-back that comment. It was very reflective of just what the Regime was thinking.
    ?
    Has anyone noticed that just before the election, the gas prices have declined to just under four dollars. After the election, you can look for the gasoline prices to rise and rise. Who says Obama can’t affect the gasoline prices?
    ?
    Tim, I agree.



  12. sammy22 on August 10, 2012 at 5:54 pm

    It would be refreshing to read something positive on this blog. Not even the US successes at the Olympics are given any traction. As for the labels of victims and whiners, I don’t read any rebuttals. Calling the Obama Administration a regime is denigrating it. He was elected by the majority of the Electoral College delegates. Can you come up with new material?



    • Dimsdale on August 10, 2012 at 6:52 pm

      The most positive thing I can think of would be the ouster of the poseur in chief, stanching the bleeding of the economy.
      ?
      I have no qualms about denigrating this regime, something started by the lefties when Bush was president.? He, too, was elected by a majority of the EC, and was hounded by liberals for his entire two terms.??
      ?
      For the record:
      ?

      re?gime
      ?[?ray zh?m?]???

      form of government:?a system or style of government
      particular government:?the government of a particular country, especially one that is considered to be oppressive
      controlling group:?any controlling or managing group, or the system of control and management adopted by it

      ?
      As for new material, well, the latest pro ?bama ads that are shown to be outright lies even by liberal groups are new, and you can be sure there will be more of them, since ?bama can’t run on a record of accomplishment.? As the panic increases, the veracity of the ads will decrease.



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