The Gas Station

Gas Stations

As a child I looked forward to my parents filling up at the gas station. This meant I could go in and get a drink and a snack. Now, times have changed. Now, I lament the thought of crossing the threshold of the local convenience store. With a record high for American’s average price for a gallon of gasoline, $3.27 (set on 3-13-07), anyone driving is feeling the squeeze of rising gas prices. The question then is where does all that money go? For that price why isn’t this store filled with plasma televisions and marble statues?

The reason is very little of the money from gas goes towards the gas station selling it. Most stations are independently owned and only get 7-10 cents per gallon no matter what the gas price is. All of these figures are with respect to a gallon of gas costing $3.04. Therefore, the store isn’t staying open on the sales of gasoline alone. The majority of the profit comes from the selling of coffee, cigarettes, food, and other items. The few cents acquired from the fuel doesn’t even make a profit but instead goes towards the payment of workers, lease, and other expenses.

Oil traders don’t benefit from rising prices. They only collect if they make the proper guesses in the market. If prices go down, they can still be making money. Taxes, on the other hand, take out a fair portion. The government takes 40 cents right off the top; 18 cents goes to the federal government. State taxes vary from state to state with an average of 22 cents. Taxes go to the maintenance of roads or the creation of new ones. The transportation cost of the gasoline via pipeline or truck from industry to your car takes about 23-26 cents. Refining companies such as Valero Sunoco, Frontier, ExxonMobil, Chevron, and ConocoPhillips take 24 cents per gallon. There is the crude oil companies--Chevron, Anadarko, marathon or national oil companies—in Saudi Arabia, Mexico, and Venezuela who take the largest portion which is $2.07. Currently charging $110 a barrel goes towards the exploration, production, and royalty payments for the oil. Companies such as Exxon did pay $100 billion in taxes in 2007. Nevertheless, Exxon netted a $40 billion intake for 2007; a 60% increase from 2004.

On April 1, 2008 Rep Edward Markey, Democrat from Massachusetts, has called the chief executives of the five biggest oil companies to testify on the industry’s record profits.

The figures given were from the Energy Information Administration.

Citation: "Who Gets Rich off $3 Gas-Who Doesn't." March 13, 2008 March 13, 2008. <http://cnnmoney.printthis.slickability.com/pt/cpt?acton=cpt&title=Dissecting+a+gallon+o...