It’s been a roller coaster summer at the gas pump, with gas prices falling and then ticking back up again. What causes all this change, we wonder? A new article on MSN Money gives the break down:
The American Petroleum Institute says it takes one gallon of oil to make a gallon of gasoline. The price of oil is determined in commodity markets, where companies and traders buy and sell petroleum for purposes that can include refining it into gasoline and holding it as an investment. The markets, and the prices they set, are influenced by supply-and-demand factors, such as trouble in the Middle East that could result in less oil coming from that region of the world.
After oil prices, the rest of the price of a gallon of gas comes from taxes (14%) and costs associated with refining, moving and selling the gasoline (15%), according to the API.