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Why haven’t gas prices fallen as much as oil?

Last Updated: April 6, 2016

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?

gas-pump

Assume gas of $3.50 Gallon

$0.49 Taxes (average – see below)
$0.175 Distribution & Marketing
$0.175 Refining
$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

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The CompanyMileage Team

Written by The CompanyMileage Team

Marketing

CompanyMileage helps hundreds of organizations across multiple industries effectively manage the cost of reimbursing employee mileage expenses through it's mileage and expense management software solutions.

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