Sunday, May 07, 2006

Where do your gas dollars go?

Got this note, included in my Mobil credit card bill:

The biggest component of the price of gasoline - recently around 60% - is the cost of crude oil. Worldwide, crude prices have more than doubled in the past two years, causing gas prices to rise.

Refining, transportation, and marketing account for another 20% of the pump price. Then there are federal and state taxes: currently about 20%

Today, the U.S. has around 170,000 service stations. ExxonMobil owns - and sets pump prices - at less than 1,000 of them. The vast majority are independent businesses, whose gross profit per gallon is around 5% - that's less than 12 cents, based on the average price in January.

Of course, the prices you pay at the pump goes up and down. This is due to supply and demand: for crude oil globally, and for gasoline locally. But the way the money is split - between governments, suppliers, refiners and station owners - has hardly changed in 25 years.

During 2005, we invested an average of almost $50 million every single day to meet future oil and gas demand. Since 2001, we have invested $74 billion, on six continents, in projects designed to secure long-term energy supplies. In fact, over the last fifteen years, we have invested more than we have earned. Naturally, our earnings go up and down with the business cycle. But our commitment to plan and invest for the future does not.


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