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The dramatic fluctuations in gasoline prices are a result of a highly competitive gasoline market, and according to the Energy Information Administration, the basic costs to produce and deliver gasoline to consumers encompass the cost and availability of crude oil, which is approximately 46% of the price; marketing and distribution costs, 12% of the price; refining costs and profits, 14%; and federal and state taxes, 28% (“A Primer”). Gasoline is shipped from refineries to retail stations by pipelines or trucks, and a number of price markups, which vary from region to region due to the formulations required to produce different grades of gasoline, may be added to the consumer’s price along the way (“Gasoline Price”). ... Taxes and factors other than the cost of crude oil account for more than half of the price paid by the consumer for a gallon of motor gasoline. ... The Senate Committee on Government Affairs claimed in April 2002, that “many oil companies use zone pricing to charge different prices for gasoline to different station operators in order to confine price competition to the smallest area possible and to maximize their prices and revenues at each retail outlet.
Approximate Word count = 882
Approximate Pages = 3.5
(250 words per page double spaced)
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