What is included in the price of a gallon of gasoline?
The price of a gallon of gasoline can be divided into four main components: the price of crude oil, the cost of refining that oil, the cost of distribution and marketing, and state and federal taxes.(2) In September 2000, the average price of a gallon of gasoline was $1.55. Crude oil accounted for $0.75, taxes for $0.42, distribution and marketing for $0.14, and refining for $0.24. By comparison, the average price for a gallon of gasoline was $4.06 in July 2008. Taxes have remained fairly constant since 2000, making up $0.40 of the price. Indeed, the federal gasoline excise tax has been $0.184 per gallon since late 1997.(3) The price of distribution and marketing increased to $0.45 per gallon, but the percentage of the cost has remained fairly consistent at about 10 percent of the total price. The price for crude oil, on the other hand, has been the main driver in the increase in gas prices and amounts to $3.08 of the $4.06 gallon of gas in July 2008. Crude oil now makes up around 75 p
