|Issue of the Day: Components of Gas Prices|
Published Tuesday, June 16th, 2009
The price of gas in the last 48 days has risen $0.61 or 30.3% on average nationwide to set a gallon of regular unleaded gasoline to $2.669 on Monday. This comes as global events pull crude lower to $70 a barrel. Crude has had a rollercoaster ride with global events such as protests in Iran and sabotage in the Niger Delta; the World’s Reserve Currency and OPEC (Organization of Petroleum Exporting Countries) have stated that $75-80 per barrel is a fair level.
From each barrel of crude, a refinery produces 19.15 gallons of gasoline, 9.21 gallons of diesel, and 16.32 gallons of various other products. In 2007, the cost of crude oil only contributed 58% to the price of gas per gallon at the pump; this is 10 percent higher than previous years. The refining cost — up 1% from the previous 7 years — contributed 17% to the average distribution cost of a gallon of regular. Distribution, marketing and retail dealer costs and profits in 2007 were 10% of the gasoline price, which is down from the 2000-2007 average of 12%. The demand for gas in the US, another factor in the price per gallon, is driven by a steady increase in the monthly vehicle mileage. Given slow rise in vehicle fuel efficiency, the US consumption of gasoline has, since 1980, remained about 700 gallons per year or a consumption of 9 million of barrels of crude oil a day.