What contributes to the retail price of gasoline?
The cost to produce and deliver gasoline to consumers includes the cost of crude oil to refiners, refinery processing costs, marketing and distribution costs, and finally the retail station costs and taxes. The prices paid by consumers at the pump reflect these costs, as well as the profits (and sometimes losses) of refiners, marketers, distributors, and retail station owners. Federal, State, and local taxes are a large component of the retail price of gasoline. In December 2006 when the average retail price was $2.31/gallon, taxes accounted for 20% of the cost of a gallon of gasoline. The crude oil price made up 58% of the retail price of gasoline while the refining costs and the refiner s profits made up 13%. Finally, the distribution, marketing and retail dealer costs and profits combined made up 9% of the cost of a gallon of gasoline. Source: U.S.
