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Unfortunately, there's no simple way to determine the cost of producing a gallon of gas. This puts consumers (and Ask Yahoo! writers) at a disadvantage in trying to solve the puzzle. According to the Oregon Department of Energy, the current wholesale price of gasoline is 90 cents per gallon. But wholesale prices are usually higher than production costs, so we kept looking. Most online resources prefer to explain the components of the retail cost of gasoline. The Energy Information Administration writes that in 2004, when gas averaged $1.85 a gallon (good times, huh?), this is how
the price broke down: - Crude Oil -- 47%
- Federal and State Taxes -- 23%
- Refining Costs and Profits -- 18%
- Distribution and Marketing -- 12%
| The production cost from 2004 would then be a combination of the component cost of crude oil (87 cents per gallon) and refining costs. But since profits are lumped in with the refining costs, it's hard to get a pure production number. The total comes in at $1.20, which is significantly higher than the 90-cent wholesale the Oregon Department of Energy quoted. It's no wonder gas prices are causing so many headaches. Just trying to figure out the production cost has us reaching for the ibuprofen.
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