Oil has dropped 25% in the last few months, yet gasoline has only dropped 12-13%.
Though we all equate oil and gasoline there are several other components that affect the price of gasoline; Taxes, Distribution, Marketing and Refining. These expenses are fairly flat and therefore make up a larger percentage of gasoline as the price of crude drops.
What makes up the price of gas?
Assume gas of $3.50 Gallon
$0.49 Taxes (average – see below)
$0.175 Distribution & Marketing
$2.66 Crude Oil
Did you know that Gasoline Taxes vary dramatically by state, from as low as 26.4¢ in Alaska to as high as 69¢ in California and throughout the East Coast.
Click the image below to see a full report on taxes by state prepared by American Petroleum Institute