What determines how much we pay for gas???

Question

How are gas prices determined and why do they keep going up and down everyday?

Answer 1

Supposedly, market prices, delays at refineries, all contribute to how much the price of oil is. It's not all done by big , bad oil companies who want to rip you off. The tree-huggin' society and liberal Democrats have put up fiscal barriers to economically build new refineries, for the last 20 YEARS, so there are only so many refineries in America to crack the oil into diesel, gas, #1 fuel oil, etc. It's like an Internet hub getting overloaded on Friday nights, everyone is online at once, so it slows down. So blame it in part on the Environ-Mental nazis who don't want more refineries built at ANY cost, the tax-crazed Dems, and our true friends , "we'll watch your back" Arab oil sheiks. All contribute to higher prices.
- The Gremlin Guy -

Answer 2

I'll break it down for you.
Oil is drilled all over the world. The oil producers sell it to the refineries who turn the oil into gasoline and diesel. The the producers charge, is generally based on a "benchmark" like West Texas Crude. When the oil is pumped a gallon might be $66 a gallon.
However, the producer of the oil can sell future production of the oil. If you look it up online it's called oil futures. This price is generally from $72 -$76 right now. The futures price will go up in anticipation of shortages, strikes, Middle East conflict. This is what causes the fluctuations. When summer winds down and hurricane season is over, these prices will drop to 60 - 66 dollars a gallon.
OPEC will also play a role in the supply which of course affects the price.
So now the refiners produce it to gas stations. There's more to it but that's the jest of it.

Answer 3

OPEC nations control this.
Basically there are a handful of nations who control oil production, since their country is sitting on tons of it. So they basically have a collective monopoly together. So what they do is get together and have a chat. They say lets all raise our prices for our oil for such a period of time. So they all increase their prices to the same thing, because they know we need oil so we'll pay whatever price they charge because we're idiots.

And they all use the same price, unlike here where competitors try and use lower prices to steal customers. They're being smarter by working together so they all make more money.

Since gas companies have to pay these higher prices to the OPEC nations, they in turn raise their prices to turn profit.

So the OPEC nations control the price of gas based on their own greed.

Answer 4

it all about the greed. any any excuse they can come up with. there is only a few cents of tax, like $.44 or so the reast is refining, cost of crude, etc. but most is the profits the oil comps. want to make. and with record multi BILLION dollar profits in a quarter, not a year. that is why the gas keeps going up and up,GREED. and the major oil companies havent build any new refineries for 30 years. they are old and delapidated. here is cost breakdown.

Distribution Costs, Marketing Costs and Profits $0.27
Crude Oil Cost $1.76
Refinery Cost and Profits $0.39
State Underground
Storage Tank Fee $0.01
State and Local Sales Tax $0.22
State Excise Tax $0.18
Federal Excise Tax $0.18
Retail prices per gallon $3.02

Answer 5

Global prices, what the world market will pay for oil, annnnnd
Taxes.

Congress wants to impose 18 cents additional tax on gas.
Pres. Bush threatens to veto the proposal.