Did you know that oil makes up only 22.8% of the mileage rate? ( see breakdown of IRS mileage rates here ). Therefore, even though oil has dropped 25% that only equates to about 3 cents per mile (6%). Below is a historical look at Mileage Rates, Crude Prices and Avg Fuel Prices. The mileage rate typically is based on the prior year fuel prices as the IRS usually sets the rate Jan 1 each year. As you can see even in 2009 when oil was $53.52 per barrel the rate for 2010 was still 50 ¢ per mile.
We can all hope that oil drops dramatically and therefore gasoline drops and then eventually the IRS mileage rate will drop OR you can check out CompanyMileage.com today to see how we are saving our clients an average of 25% on their mileage reimbursement expense.