Where Does the Price of Gas Come From?

Tuesday, April 3, 2012

From an article by Jill Schlesinger on CBSnews.com:

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Gas prices are nearly 31 cents higher than a year ago. The biggest culprit for the rise in prices at the pumps is the $30 spike in crude oil that has occurred from $75/barrel in October to $105 today. The reason is that crude oil is the largest contributor to the price at the pumps.

Here's a break down of a $1 at the pump as of January 2012, according to the Energy Information Administration (EIA):

  • Crude oil: 76 cents
  • Taxes: 12 cents
  • Distribution and Marketing: 6 cents
  • Refining costs and profits: 6 cents
And what is the main factor controlling the price of crude oil? OPEC.

How does OPEC control gas prices?

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