People have often wondered what is goes in the price at the gas pump….The image above is a simplistic economic model of gas prices…..
Crude Oil (80% of the gas price)…..The raw material that is extracted from the earth. The processes involved in this extraction accounts for the costs of the stipulated 80% share of the gas price. The price is set by the supply and demand of the global market not oil companies (their jobs deals with the technical and engineering methods in oil extraction/production).
Refining (-12% of the gas price)…..The number -12% is a rough average that goes into gas prices. The negative number is confusing because it seems that refineries are operating at a loss. That is partly true.  Refineries operate on the terms of the global market….The profit made by refineries is directly proportional to the demand of petroleum and its subsidiary products. So it is very possible that cost of refining crude oil is higher than actually the profit made by refining it. The higher the stipulated above percentage, the more money the refineries make and the higher the gas prices.
Distribution and marketing (10% of the gas price)….After refining, there has to be distribution channels to reach consumers. The distribution channels include trucks and pipelines. The retailers then set the price at the gas pump accounting for the distribution costs, taxes and labor. It is important to note the gas stations are not mostly owned by ExxonMobil, Shell, Conocophilips but owned by retailers who pay some dividend to the above companies by using its name not profits.
Taxes(12% of the gas price)….. State and Federal Taxes……
It is important to note that this percentages and gas prices are subject to change due to political conflicts especially with oil producing countries, natural disasters,  refineries with inadequate maintenance and  finding new highly producible oil fields,
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