Gasoline Prices: Who Decides on How Much We Pay?

When I'm driving around I am always checking out gas prices at each station I pass by. I want cheap gas. It's that simple. I don't want to pay a lot. I have never understood how one day gas can be $2.92 then six hours later as I'm driving home it has increased to $3.24. That just pisses me off. How can it change so quickly in a matter of a few hours? I came across this article in the Texas Insider that breaks down the price of a gallon of gas. Okay, now I understand. I still don't like it but I get it now.

It all comes down to supply and demand. Add in how the oil is manufactured, sold, and the government taxes and that determines the price you have to pay. First, crude oil is a raw material that is made into gasoline. Crude oil is a commodity that is traded everyday in the global market. The global market sets the price of crude oil whereby speculators, buyers and sellers respond according to the world's everyday supply and demand. The price of crude oil accounts for 80 percent of the retail price we pay. After the oil is bought it then has to be manufactured into gasoline. Manufacturers then try to recover their costs plus make a profit when they sell the gasoline. On average 11 percent of the price of gas is due to the cost it takes to refine it. After it is manufactered, the gas leaves the refinery where it is then distributed to retail and service stations. The final price is set by the retailers who try to recover the costs of getting the gasoline and marketing it to the public. They also have to make enough of a profit to pay the government tax while keeping their business running. The tax that is payed to the government is different from state to state. Texas pays 38.4 cents per gallon.

The article also has an interesting piece on what actions can be taken to lower the price of gas. The price of crude is the biggest factor in determining gas price. One of the largest and most advanced refineries is right here in the U.S. We also have the the potential to obtain crude oil all the way down from the Gulf of Mexico to North Dakota and Montana. You can also include the oil resources from Canada, who has one of the largest in the world. But of course politics play a factor and keep these supplies in the ground and out of the tanks of consumers which doesn't help this weak economy.
When I bought my Honda ten years ago it cost me $12 to fill it up. I miss those days.