On Mon, 6 Oct 2014 22:06:40 +0000 (UTC), John McCoy
wrote:

wrote in :

On Sun, 5 Oct 2014 23:05:11 +0000 (UTC), John McCoy
wrote:

Refining, shipping, taxes, and the retailer's profit add up
to about $1.25 a gallon. Those are pretty constant (altho
the cost of shipping does vary some with the price of fuel).
The remainder is the cost of oil.

I don't see how you get $1.25 per gallon.

Looked it up on the EIA website. Note that the EIA averages
over the entire country, so there's maybe +/- 0.10 for the
difference in taxes in the various states.

It's a bit more than a $.10 difference. CA's gas tax is $.69, where AK
is $.324. The states mentioned here are AL, $.393, and SC, $.352.

Let me try this again: At $100/bbl, there is $2.50 in the oil alone
(I doubt there is much more valuable than gasoline in there but if you
have a reference...). At $3.00 per gallon for gasoline, that leaves
only $.50 for refining, distribution, and profit.

There's two flaws in your reasoning. One is that only about
40% of a barrel of oil ends up as gasoline.

Irrelevant. The rest is used for other things that are also worth real
money. I'm putting bounds on the numbers. Nothing in there is worth
(much, if anything) more than gasoline so it's a decent back-o-the
napkin estimate.

The other is that
you can't sell gasoline at $3/gallon with oil at $100/bbl.
To get $3 gas you need oil well below $90/bbl (oil is currently
right at $90/bbl, and gas is averaging around $3.20(*)). At
$100, which is where oil was back around July, gas was averaging
close to $3.60.

I just paid $2.969 per gallon in Auburn AL. Oil is something like
$90/bbl right now. So that's $2.25/gal. So, OK, there is $.71 left
for everything else, including taxes.

(* yeah, I know you can find it cheaper. Got it at $2.99 in
South Carolina Friday. Even there, tho, that was an anomaly,
most stations were $3.07 - $3.09)

That was a Sams (members only) but Kroger, down the street was $2.989.
Both were credit transactions, so add another $.10 to the cost.

All in all, it's amazing they can produce gasoline, distribute it, and
pay the taxes at this price. Gasoline is amazing stuff. I *like* it.