Price of Gasoline

In: English and Literature

Submitted By blaine
Words 1751
Pages 8
Gasoline, one of the main products refined from crude oil, accounts for just about 17 percent of the energy consumed in the United States. The primary use for gasoline is in automobiles and light trucks. Gasoline also fuels boats, recreational vehicles, and various farm and other equipment. While gasoline is produced year-round, extra volumes are made in time for summer driving season. Gasoline is delivered from oil refineries mainly through pipelines to a massive distribution chain serving estimated 168,987 retail gasoline stations throughout the United States. There are three main grades of gasoline: regular, mid-grade, and premium. Each grade has a different octane level. Price levels vary by grade, but the price different between grades is generally constant.

The cost to produce and deliver gasoline to consumers includes the cost of crude oil to refiners, refinery processing costs, marketing and distribution costs, and finally the retain station costs and taxes. The price paid by consumers at the pump reflect these costs as well as the profits (and sometimes losses) of refiners, marketers, distributors, and retail station owners. Federal, State, and local taxes area large component of the retail price of gasoline. Taxes (not including county and local taxes) account for approximately 19 percent of the cost of a gallon of gasoline. (www.fueleconomy.gov)

Why do gasoline prices fluctuate?-We seem to be wondering more often then not.
Even when crude oil prices are stable, gasoline prices normally fluctuate due to factors such as seasonality, and local retail station competition. Additionally, gasoline pries can change rapidly due to crude oil supply disruptions stemming from world events, or domestic problems such as refinery or pipeline outages. Seasonality in the demand for gasoline-When crude oil prices are stable, retail gasoline prices tend…...

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