Gasoline helps power the American dream, giving
us the freedom to travel where we want and when we want -- for work,
for school or for recreation. A steady supply of clean-burning gasoline
is central to our nation's economy.
1.
GASOLINE PRICES IN PERSPECTIVE
Find out more about how global supply and demand factors affect gasoline prices.
THE TRUTH ABOUT OIL AND GASOLINE: AN API PRIMER
America is in a global struggle for energy security and many of us lack a full understanding of the oil and natural gas industry. API has assembled a primer to encourage a constructive public policy debate on meeting the growing energy needs of consumers and industry. Sections include discussions of global energy demand, price increases, what consumers are paying at the pump, earnings, refinery expansions, the environment and energy security. See full report: “The Truth About Oil and Gasoline: An API Primer”
The Truth About Oil and Gasoline
UNDERSTANDING TODAY'S CRUDE OIL AND PRODUCT MARKETS
American consumers, and policy makers, are anxious for answers to explain why fuel bills are getting more expensive and how crude oil prices affect the price of gasoline and other refined products. In a project commissioned by the American Petroleum Institute, Lexecon. a unit of business consultancy FTI, has put together a primer called “Understanding Today’s Crude Oil and Products Markets.”
Major Flows of Crude Oil
WHAT'S HAPPENING WITH GASOLINE PRICES?
American refiners compete for crude oil supplies in a global
marketplace. When crude oil supplies are tight, our refiners
have to bid higher to ensure a steady supply of fuel for American
consumers and businesses. The cost of crude oil is
reflected in the price you pay at the pump.
Mouse over the map below to view the factors that affect world-wide supply and demand.
It takes just a few short minutes for you to fill up at the
pump. But it takes a global network of production, transportation,
refining and distribution to make that fill-up possible. Explore
the links below to learn how crude oil reserves located deep
within the Earth are recovered and refined into the gasoline
(and many other products) you count on every day.
Mouse over the map
above to view the key participants in world crude
oil supply and demand and their role in the price
of gasoline today. The United States imports about
62 percent of its oil. For the latest figures about
which countries export the most to our nation, see: http://www.api.org/aboutoilgas/gasoline/upload/US_Imports.pdf
The major components of gasoline prices are the cost of crude oil to refiners, federal and state taxes, and the cost to manufacture, distribute, and market gasoline. Gasoline prices generally reflect price trends for crude oil.
WHY DOES
THE COST OF GASOLINE DIFFER FROM PLACE TO PLACE?
The federal government's Energy Information Administration
(EIA) data indicate that average retail gasoline prices tend
to be higher in certain areas than in others. One reason is
that state and local taxes vary. Other factors that may contribute
to regional and even local differences include:
Proximity of supply
Supply disruptions
Competition in local markets
Environmental requirements
Operating costs
Gasoline Prices - How Much are You Paying?
Click on a state in the U.S.A. map to find the current gasoline
price average for that state.
Drivers have many options when it comes to saving money at
the fuel pump. Here are some useful tips to help you cut down
your fuel bill.
Fuel Saving Tips
Have your car tuned regularly. An engine tune-up can improve
car fuel economy by an average of 1 mile per gallon.
Keep your tires properly inflated. Under-inflated tires
can decrease fuel economy by up to 1 mile per gallon.
Slow down. The faster you drive, the more gasoline your
car uses. Driving at 65 miles per hour rather than 55 miles
per hour reduces fuel economy by about 2 miles per gallon.
Avoid jackrabbit starts. Abrupt starts require about twice
as much gasoline as gradual starts.
Pace your driving. Unnecessary speedups, slowdowns and
stops can decrease fuel economy by up to 2 miles per gallon.
Use your air conditioner sparingly. The use of air conditioning
can reduce fuel economy by as much as 2 miles per gallon.
Avoid lengthy engine idling. Turn your engine off when
you are delayed for more than a couple of minutes.
Plan your trips carefully. Combine short trips into one
to do all your errands. Avoid traveling during rush hours
if possible, to reduce fuel-consumption patterns such as
starting and stopping and numerous idling periods. Consider
joining a car pool.
Oil and natural gas industry profits are right in line with
the average for all industries. Because gasoline is so important
to everyday life, some folks get nervous when prices go up
and raise allegations of price gouging by oil companies. But,
over the years, more than 30 government reports have confirmed
that gasoline pricing is driven by legitimate market forces.
The cost of gasoline at the pump is actually the cost of
crude oil plus the cost of refining plus the cost of distribution
plus... well, just scroll down.
WHAT INFLUENCES
PRICES?
Gasoline prices are driven by the realities of global supply
and demand for crude oil. There are also costs associated
with refining, distributing and delivering gasoline that factor
into the price you pay at the pump. When you adjust for inflation,
today's pump price is actually lower than the peak retail
prices of 1981. The relatively lower costs over the past two
decades can be attributed largely to lower crude oil costs.
Manufacturing, distribution, and marketing costs have also
declined. Only taxes have increased.
HOW
DO TAXES AFFECT THE PRICE YOU PAY FOR GASOLINE?
Taxes add a significant amount to the price of motor fuel and vary widely by state. For the first quarter of 2008, the average state gasoline tax is 28.6 cents per gallon, plus 18.4 cents per gallon federal tax making the total 47 cents per gallon. For diesel, the average state tax is 29.2 cents per gallon plus an additional 24.4 cents per gallon federal tax making the total 53.6 cents per gallon. See map below for more details..
The Impact of Taxes on Gasoline Prices 2008 - State & Federal
Gasoline Taxes
Click on the U.S.A map above to see figures in greater detail.
Gasoline is refined from crude oil produced both here in
the US and abroad. Find out where it comes from and how it
gets to your neighborhood service station.
HOW
IS GASOLINE MADE?
Crude oil is basically a mix of hydrocarbons -- molecules
made up of carbon, hydrogen and various other elements --
that differ widely in size, structure and characteristics.
A refinery sorts and processes these hydrocarbons into useful
and reliable products, including gasoline, heating oil and
diesel. Today's refineries must also fine-tune different batches
of gasoline to meet regulatory requirements that vary from
state to state. Regardless of where you live, the gasoline
you use is engineered to be the cleanest ever, protecting
both your health and our environment.
HOW
DOES GASOLINE GET FROM THE
REFINERY TO YOUR LOCAL SERVICE STATION?
Most refined gasoline travels via pipeline to large storage
tanks that feed into local distribution centers around the
country. The final leg of the journey - from the terminal
to your local service station -- is made by tanker truck.
Despite all this travel, major leaks and spills in US waters
are rare these days, evidence of an industry commitment to
using the latest technologies and preventive measures.
The US EPA says vehicle emissions are down 41 percent since
1970, even with more drivers than ever on the road.
CLEANER FUEL MEANS CLEANER AIR
The average new car on the road today runs 97 percent cleaner
than the average car built in 1970, thanks to a combination
of cleaner gasoline and more efficient engines. As a result
- although there are more Americans driving more miles in
more cars than ever before - automobile-related emissions
are down 41 percent since 1970.
HOW
MUCH HAS THE OIL AND NATURAL GAS INDUSTRY INVESTED IN ENVIRONMENTAL
IMPROVEMENT?
The oil industry has spent an estimated $89 billion since
1993 to strengthen its environmental performance. This amounts
to $308 for every man, woman, and child in the United States.
While the environmental benefit of this investment is clear
in our nation's ever-improving air quality, there has been
a cost. Many refineries have been forced to close because
they could not afford to meet more stringent government regulations.
Today, approximately 150 refineries work to meet America's
growing demand for gasoline, compared to more than 300 in
1980.
US Oil and Natural Gas Industry Environmental Expenditures
(1994 - 2005) In Billions of Dollars
