Not that I could tell from the number of people racing by me as I drove at 55 mph into work today, but Minnesotans are up in arms over the price of gas and it’s crippling their finances. A gallon of gas is going for an average of $3.95 today (it’s $4.08 at one station in Burnsville, according to twincitiesgasprices.com.
This week the major oil companies are scheduled to report their first quarter income and it’s expected to reveal high profits, which should spawn another round of complaints from politicians.
What goes into the price of a gallon of gasoline? Here’s an interesting graphic from PBS’ NewsHour.
Let’s see if these numbers work.
A barrel of oil today is going for $111.42 a barrel, which is 42 gallons. That’s $2.65 a gallon.
At today’s price, 14% for refining is 55 cents. (Total so far: $ 3.20)
Eight percent for distribution and marketing is about 32 cents. (Total: $3.54)
And 13% for taxes is 51 cents, for a total of $4.05, or 10 cents more than we’re actually paying (Minnesota’s gas tax is about 27 cents, and 15 cents is credited to a wholesaler to encourage ethanol manufacturing. The federal tax is about 18 cents a gallon).
What can be done? As the famous maxim goes, “the cure for the high price of oil is the high price of oil.” Use less. Slow down.