Turmoil in the Middle East and industrial revolutions out of China, India and Brazil are driving crude oil prices higher than $100 a barrel. What does that mean for the price of gasoline in the United States?
Quite a bit. Few consumer products track commodity prices as closely as gasoline, 71 percent of which is determined by the price of crude oil. Where does the other 29 percent come from? Ken Cohen breaks it down, with an assist from the Department of Energy:
But just how much does the price of crude impact U.S. gasoline prices? In November 2010, when the average retail gasoline price was $2.86 a gallon, crude oil accounted for 71 percent of that price.
So what makes up the other 29 percent of gasoline prices? According to the Department of Energy, combined federal and state taxes on gasoline accounted for 14 percent of the average price. The remaining 15 percent of the price on average covers the costs of refining, transportation and marketing. The DOE chart at left shows this average price breakdown.
Read the full story at ExxonMobil Perspectives.