Nevada County Picayune and Gurdon Times Newspaper Archive

Gas prices going up

It's obvious everyone has noticed the increase in gasoline prices. The problem however is understanding why they are high.

Almost 60 percent of motorists fill their vehicle with fuel at convenient stores.

Did you know that on average 93 percent of the price of a gallon of gas is determined before it reaches the local convenience store.

To break it down for consumers her are some facts. Almost 44 percent of the retail price of gas reflects the price if crude oil. Federal, state and local government takes up about 30 percent of the price.

The cost of refining crude into gasoline is responsible for about 19 percent and only 7 percent of the price is made up by retailing, distribution, and marketing cost.

It is amazing to know only 7 percent of the cost of a gallon of gas actually goes to retailers. However, you must remember the 7 percent is also shared with distribution and marketing.

You may be wondering what exactly makes the prices of gasoline so high for the summer months. The answer to this is "supply and demand". Anyone can figure out with a combination of good weather and vacation season at full force the demand for gasoline is high.

The demands for gasoline actually increase by 5 percent during this time.

The Environmental Protection Agency also plays a part in the rise of prices. During summer months producers must put out new summertime formulations of gasoline required by the EPA. Sometimes this calls for a price change.

The U.S. Department of Energy says the crude oil and gasoline inventories are below normal and are expected to remain low through the driving season.