News reported last year bbl oil $63, gal gas $3.20- today, $126/$4 - Why not $6.40 gal?

[HardWorkingDem]

I'm just curious. Last week the news reported a year ago a barrel of oil was $63 and a gallon of gas was $3.20 and a year to this day a barrel of oil was $126 and a gallon of gas $4.

If a barrel of oil doubled in cost, then why did a gallon of gas only go up 80 cents? Does this show some sort of manipulation? What am I missing?

[Vincardog]

1. relax take a deep breath. They ase screwing us as hard as they can

[CC]

2. Because they knew if the raised it that

fast people would be protesting in the streets. That is also why they come out with their list of a million reasons why it is so high and none of them are the oil companies fault every other day.

[madinmaryland]

3. Only the price of the crude oil has changed.

The price of refining, transporting, and sales overhead has remained constant.

Using your example, the price of a barrel has increased by $63. If you take a gallon of crude (55 gallons per barrel) = $1.15. That would be the reason that the price of gasoline has not doubled.

[The_Casual_Observer]

4. Ask and you shall receive, other than that the taxes are per gallon

& not percent of price so it doesn't quite work out that way.

[Prisoner_Number_Six]

5. SSShhhhh... they may HEAR you.

You don't wanna give 'em any ideas...

[Warpy]

6. The >$120 price is for spot market futures

and most of the oil turned into gasoline is bought via long term contract for far less. Spot market oil is only purchased when something happens to cause a shortfall in contract oil, like a tanker sinking or a pipeline accident.

The contracts have recently been renegotiated and the 50% fall in the dollar is responsible for the increase in gas prices. They're mostly here to stay, at least until the present contracts are up, although I expect to see a $0.50 decrease "bonanza" toward the election next fall.

Get used to it, in other words.

[cloudythescribbler]

7. what % of the price of gasoline at the pump is crude? taxes? overhead? then you can calculate ...

impact on final price

[LSK]

8. maybe because the cost to refine it did not raise drastically

[Terry in Austin]

9. Oil products

Oil yields a lot of products besides gasoline, each with their own production costs and pricing. Diesel, for example, is about a buck more than gas these days.

From a 42-gallon barrel, we get about:

• 19.5 gallons of gasoline
  
• 9 gallons of fuel oil
  
• 4 gallons of jet fuel
  
• 11 gallons of other products (lubricants, kerosene, asphalt, and feedstocks to make plastics)

Here's another source that includes an explanation of why it adds up to more than 42 gallons!