There are five primary factors that effect the price you
pay for gas at the pump. Prices generally increase when
the world crude oil market lowers their inventories. Also,
when demand exceeds refinery capacity gas prices increase.
The first factor that makes up the price of gas at your
local station is crude oil suppliers. This makes up about
59% of the price you pay for gas and it is determined by
the world's oil-exporting countries, particularly OPEC,
the Organization of the Petroleum Exporting Countries. The
amount of crude oil that these countries produce determines
the price per barrel of oil.
The next factor that effects gas prices is the cost of
refining the crude oil. This makes up about 10% of the
total price of gas.
The third factor is the cost of transporting the crude oil
to a refinery, then the refined gas to a distribution point
and finally to your local gas station. If you are buying a
brand name of gasoline, the cost that company spends in
marketing their brand will also be added to the price you
pay to buy from that brand. This makes up around 11% of
the total price.
The forth factor accounts for about 20% of the total cost
of gas, and it includes federal and local taxes. State,
local and city taxes vary, accounting for some of the
fluctuation you may see in gas prices in different
geographical areas.
The fifth factor is the markup at your local gas station.
Obviously your local gas station is in business to make
money and has employees to pay. So you know that they must
make money on every gallon of gas they sell. You may be
surprised however to learn that the amount is generally
not more than 10 cent and may be as low as a penny per
gallon! Some states do have laws governing station markup
and require a minimum percentage markup to protect small
stations from being put out of business by larger companies
who may want to undercut them.
Lisa Beers is an expert in increasing gas mileage for
any vehicle. To contact her or find out more about
increasing your gas mileage visit:
http://bettergasmileagetoday.com
