Where Your Money Goes at the Gas Pump - KAIT Jonesboro, AR - Region 8 News, weather, sports

Jonesboro, AR - Shannon Johnson Reports

Where Your Money Goes at the Gas Pump

Posted June 8, 2004 @ 10:31 p.m. CDT

JONESBORO -- Even though gas prices are are down, they are still sky high. The average price around Jonesboro is about $ 1.79 per gallon. You've probably heard that crude oil plays a hugh role in determining gas prices but there's more to the story. Based on national averages the U.S. Department of Energy breaks down exactly how the money you pump into your tank is distributed. Most of us think it's all about crude oil but, the price of crude makes up less than half of the cost at 43 percent. The rest of the breakdown goes like this.

13% Refining Cost and Marketing

13% Distribution and Marketing

31% Taxes

     So no matter how expensive gas becomes all of these entities have to get their slice of the pie or their slice of your paycheck.

     If we break this down into monetary terms and use $ 1.79 as the price of gas per gallon. The actual cost of the crude oil and the refining process is $1.00. That means the gas it self only cost $1 per gallon. Then $0.56 would go to Uncle Sam in taxes and $ 0.23 goes to distribution, marketing and profits.

     To learn more about how gas prices work long onto www.howstuffworks.com and type in gas as the keyword.

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