One of my top pet peeves is the price of gasoline in this country and the wide range of prices that you find, not only in your individual states, but also across your local gas stations.  I think that it is nothing more than price fixing and monopolization, in some local markets…like mine.  To give some perspective, I recorded this mornings lowest price for gasoline in a random city in each of the western states.  Here is the results by price:

Spokane, Washington                                                              3.08

Casper, Wyoming                                                                      3.09

Salt Lake City, Utah                                                                  3.10

Billings, Montana                                                                      3.13

Oklahoma City, Oklahoma                                                      3.15

Albuquerque, New Mexico & Topeka , Kansas                    3.24

Omaha, Nebraska                                                                      3.32

Denver, Colorado                                                                       3.35

Fort Worth, Texas                                                                      3.36

Sioux Falls, South Dakota                                                        3.37

Phoenix, Arizona & Portland ,Oregon                                   3.39

Pocatello, Idaho                                                                         3.49

Reno, Nevada                                                                             3.67

Bismarck, North Dakota                                                3.69

Los Angelos, California                                                            3.79

The following is the average breakdown of Gas Prices nationally:

 When you pump $30 into your tank, that money is broken up into little pieces that get distributed among several entities. Gas is just like any other consumer product: There’s a supply chain and several groups who are responsible for setting the price of the product. The media can sometimes lead you to believe that the price of gas is based solely on the price of crude oil, but there are actually many factors that determine what you pay at the pump. No matter how expensive gas becomes, all of these entities have to get their slice of the pie. According to the U.S. Department of Energy, here’s an approximation of where each dollar you spend on gas goes:

  • Taxes: 13 cents
  • Distribution and Marketing: 8 cents
  • Refining: 14 cents
  • Crude oil: 65 cents

This is what the average breakdown looked like in April 2011:

Crude oil – The biggest portion of the cost of gas goes to the crude-oil suppliers. This is determined by the world’s oil-exporting nations, particularly the Organization of the Petroleum Exporting Countries (OPEC).  The amount of crude oil these countries produce determines the price of a barrel of oil.  Crude-oil prices averaged around $35 per barrel (1 barrel = 42 gallons or 158.99 L) in 2004.  And, after Hurricane Katrina, some prices were almost double that.  In April 2008, crude-oil prices averaged around $104.74 per barrel. During that month, the price of oil reached a record price of almost $120 a barrel.  By May 16, prices had topped $117 per barrel.  On May 22, markets in New York and London reported prices past $135 per barrel and, and on July 11, oil hit an all-time high of $147.

Sometimes, gas prices go up even though there is plenty of crude oil on the market. It depends on what kind of oil it is. Oil can be classified as heavy or light, and as sweet or sour. Light, sweet crude is easier and cheaper to refine, but supplies are not always good. There’s plenty of heavy, sour crude available in the world, but refineries, particularly those in the U.S., have to undergo costly retooling to handle it.

Refining costs – The cost of refining diesel fuel can be considerably higher than the price of refining regular gasoline.

Distribution and marketing – Crude oil is transported to refineries, and gasoline is shipped from the refineries to distribution points and then to gas stations. The price of transportation is passed along to the consumer. Marketing the brand of the oil company is also added into the cost of the gasoline you buy.

Taxes – Federal and state governments each place excise taxes on gasoline. There may also be some additional taxes, such as applicable state sales taxes, gross receipts taxes, oil inspection fees, underground storage tank fees and other miscellaneous environmental fees. Add that to the state excise taxes, and it can average 27.4 cents.

Station markup – Of course some of the money you spend at the pump does go Gas prices also vary from state to state for several reasons. Taxes are probably the biggest factor in the different prices around the country. Additionally, competition among local gas stations can drive prices down. Distance from the oil refineries can also affect prices — stations closer to the Gulf of Mexico, where many oil refineries are located, have lower gas prices due to lower transportation costs. There are also some regional factors that can affect prices.

World events, wars and weather can also raise prices. Anything that affects any part of the process, from the moment the oil is drilled, through refining and distribution to your car will result in a change in price. Military conflicts in parts of the world with lots of oil supplies can make it difficult for oil companies to drill and ship crude oil. Hurricanes have damaged offshore drilling platforms, coastal refineries and shipping ports that receive oil tankers. If a tanker itself is lost or damaged, or leaks its oil into the ocean, that will put a dent in the market as well.

My only question is why is gasoline so damn high in my location, when gas prices are falling nationally?­