Oil to gas price ratios?
I've looked at some info that says the price of crude oil is about 50% of the price of a gallon of gas (United States), however when I put that into my calculations it always higher than what we actually pay, and these companies are obviously making money. Does anyone have up to date info on how the oil price effects the gas price (I want to know that the company pays for that gallon of gas not what we pay). Thanks in advance!
Answer:
This info is about a year old but according to it, this is the breakdown of costs for a gallon of gasoline:
Crude oil - 55%
Refining - 22%
Taxes - 19%
Distribution and marketing - 4%
Oil fields can take a very long time, on the order of decades, to develop from the exploration phase until they are finally pumping crude and having it shipped off. Oil companies invested in many of their fields in the 80's and 90's when prices were significantly lower, obviously with the expectation that they would be able to make a profit at that price. Because the cost per barrel has doubled (or more) from what it was just a few years ago their profits have gone up accordingly.
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Answer:
This info is about a year old but according to it, this is the breakdown of costs for a gallon of gasoline:
Crude oil - 55%
Refining - 22%
Taxes - 19%
Distribution and marketing - 4%
Oil fields can take a very long time, on the order of decades, to develop from the exploration phase until they are finally pumping crude and having it shipped off. Oil companies invested in many of their fields in the 80's and 90's when prices were significantly lower, obviously with the expectation that they would be able to make a profit at that price. Because the cost per barrel has doubled (or more) from what it was just a few years ago their profits have gone up accordingly.
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