how do oil exploration companies make profits?
What do oil companies make on a gallon of gasoline? A multitude of factors can affect an individual oil company’s profit on gasoline sales. However, data from the U.S. Energy Information Administration (EIA) indicates that when the average price of unleaded regular peaked at about $3 a gallon in the middle of 2006, major companies were making a profit of about 10 cents a gallon on their U.S. refining and marketing operations. Profitability factors include the efficiency of the firm’s refining, distribution and marketing system, as well as its source of raw material. In times of rising oil prices, companies that own and produce a considerable portion of the crude oil used in their refineries may benefit more than other companies that must purchase most or all of their supplies on the open market. Crude oil generally represents the single greatest cost component of gasoline, which explains why gasoline prices rise and fall so quickly with changes in the world price of crude oil. For exam
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