Artifact # 7

Bibliography: "A Primer on Gasoline Prices." Energy Information Administration. 17 Jan. 2007
primer_on_gasoline_prices/html/petbro.html>.

Notes:
-“Gasoline, one of the main products refined from crude oil, accounts for just about 17 percent of the energy consumed in the United States.”
- Gas for trucks and automobiles are the most common use but its also used to boats, machinery, recreational vehicles etc.
-More gas is produced during the summer {driving season}.
-3 types of gasoline: regular, mid-grade, and premium. Differece is octane level. “Price levels vary by grade, but the price differential between grades is generally constant.”
-Gasoline goes through refineries and is transported through pipelines to chains that serve the gas stations.
-“The cost to produce and deliver gasoline to consumers includes the cost of crude oil to refiners, refinery processing costs, marketing and distribution costs, and finally the retail station costs and taxes.” Prices paid and profits are also affected.
-Taxes have an effect on the price.
-“The price on the pump reflects both the retailer’s purchase cost for the product and the other costs of operating the service station. It also reflects local market conditions and factors, such as the desirability of the location and the marketing strategy of the owner.”
- Prices can change even if crude oil price does not. This is because of seasons and competition.
- Other major things that affect gas prices are: supply, major world events or domestic problems of the industry itself.
- Reasons for the change of prices: Seasons, Changes in cost of crude oil, supply/demand not equal and able to be met.
- Prices differ between regions. There are 7 regions in the United States.
-Prices are different based on the region because of : proximity of supply, supply distribution, competition locally, and the environmental programs in the area.
-California has much higher gas prices because it has its own ‘reformulated gasoline program’ separate from federal mandate clean gasoline.

Questions:
-Which of the factors can be looked into to reduce the cost?
-How much effect does competition have on the prices?
-Do Americans realize how much of the prices they are paying is because of taxes?