Wondering how all that extra money you're spending on gasoline is split up among government taxes, refinery production and corporate marketing, among other things?
It's not going to refiners, who have seen their margins drop as they scramble to turn more oil into gas. It's not going to corner gas stations, many of whom say they are being forced out of business by falling profits. And it's not going to the federal government, which is seeing its gas tax revenue slide as people drive less to save money.
"It's the guys who own the oil being pumped out of the ground, and overwhelmingly, it's people in the Middle East," said Lester Lave, an energy expert and economist at Carnegie Mellon University.
Based on June figures, crude oil accounted for 74 percent of the price of a gallon of gas, which at that time averaged $4.05 nationwide, the Energy Information Administration reports. (The agency's June figures are the most recent available.) At that price, gas would still cost $3.03 per gallon if you eliminated all costs for taxes (39.9 cents), distribution and marketing (27.7 cents), and refining (34.6 cents).
The price of oil has since come down a bit, falling to about $120 per barrel last week after hitting an all-time high of $147.27 in July. But it remains high by historical standards, while taxes, refining and distribution costs have remained comparatively flat. And analysts say it could easily rise again if the Gulf Coast is hit by a hurricane, or other factors combine to renew anxieties about supply.
That's why economists say they are skeptical when they hear politicians talk about cutting gas taxes or opening the nation's strategic oil reserve in hopes of lowering prices. Both would have short-term benefits for consumers, experts say. But neither would do much to solve the underlying problem, which is that demand for oil is growing faster than supply.
"There's nothing we can really do to put down the price of oil that's going to be meaningful," Lave said.
Thomas A. Firey, a senior fellow at the Maryland Public Policy Institute, said suspending the 18.4-cent federal gas tax - as presidential contender John McCain has proposed - would do some good. But he said only about half of the benefits would go to consumers.
The other half would assist oil and gas producers, he said, because the tax cut would encourage motorists to buy more gas. That would lead to higher prices, erasing some of the benefits of lower taxes.
