The Price of Gasoline Essay -- essays research papers

The Price of GasolineWhat you are paying for when you buy a gallon of natural gas? Most people complain about the high embody of gasolene, but few understand how the price is calculated. Many people think this cost is for gas only, but many other factors determine what you pay at the pumps.Gasoline is a mixture of the lighter liquid hydrocarbons, and used chiefly as a fuel for internal-combustion engines Microsoft Encarta, 2005). Crude anele accounts for nearly 17 percent of the energy consumed in the United States. Gasoline is one of the main products developed from crude oil in the United States. The primary use for gasoline is in automobiles and light trucks. Fuel produced all year round, and is delivered from oil refineries through pipelines to a massive dispersal chain serving 167,000 retail stations throughout the United States (EIA Brochures, 2004).The prices paid by consumers at the pump reflect the cost to produce and deliver gasoline to consumers. Included is the cost of crude oil to refiners, refinery- processing costs, marketing and distribution costs, and finally the retail station costs and taxes. Approximately 27 percent of the cost of a gallon of gasoline is federal, state, and local taxes. Another 14 percent is a combination of distribution, marketing, and retail dealer costs and net profit. Refining costs and profits account for about 15 percent of the retail price of gasoline. This part varies from region to region due to the different formulations required in different split of the country (EIA Brochures, 2004) .The average retail price for gasoline tends to be higher in certain States or regions than in others. According to the Energy randomness face (EIA), other factors contribute to regional and local differences in gasoline prices aside from taxes. Special gasolines are required in some areas of the country. Environmental programs, aimed at reduce carbon monoxide, smog, and air toxins, require oxygenated reformulated, and low- volatility (evaporates more slowly) gasoline, which comes at a much higher price (EIA Brochures, 2004).The proximity of refineries to crude oil supplies can be a factor, as well as shipping costs from the refinery to market. In addition, the areas farthest from the Gulf Coast are the source of nearly half of the gasoline produced in the United States, and th... ...ors that go into that price. Whether its the taxes charged by federal state, and/or local government, the amount of competition in the region, the regions proximity to a reliable gasoline supply or even emissions regulations. The price of the fuel we buy is carefully calculated and is subject to many variables. Informed consumers should understand these factors, and deliver them in mind each time they fill their tanks.ReferenceCalifornia Energy Commission, Media and public communications office, (1994-2008), pageupdated 03/17/2007 Retrieved 05/19/2007 from http///www.energy.ca.gov/gasoline_q- and-a.htmlEnergy Information Administration, (2003) California gasoline price study preliminary findings, Retrieved 5/04/2007 from Http//www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2003/cagasoline/cagasoline.pdfSpecialized Information Services, A primer on gasoline prices, offspring number DOE/EIA-X040, (released June 2007), Retrieved 5/04/2007 from Http//www.eia.doe.gov/neic/brochure/oil_gas/primer/primer.htmSpeir, Robert A, Investigation into the current run-up in gasoline, (2004-2008) Retrieved 5/18/2007 from Http//www.iic-inc.com/curr.shtml