how do gas prices work?
Check out CNBC for crawlers on the top of the screen. You will find gas prices among the others. This is the national wholesale price per gallon. After adding transportation, retail mark-up and largest of all state taxes, the price at the pump will be approximately .70 per gallon higher in most areas. As oil gets cheaper, the cost of refining into gas becomes a larger part of the price. At recent prices, the refineries margins were squeezed to the point of no profits. Their profit margins have recently risen to a low normal level. Remember that all of their other costs besides crude oil, have not gone down at all. The lag is due to just what you imply, distributors and retailers are quick to mark up and slow to mark down in order to improve their profits. Hope this helps.
