Thursday, May 5, 2011

Bright Idea

As I was cursing under my breath at the insanity of paying almost $50 to fill up the tank on a Nissan this weekend, it occurred to me that I really didn't know how much the gas itself cost.  I knew what I paid for it, but how much of that is taxes and such?  Looking at the receipt, all I saw was the raw amount, not a list of prices for everything that's included.

When you buy groceries, you don't just get a short slip of paper with the final amount.  You get an itemized list of what you bought, and how much each of those items cost, along with a sub-total, the amount of tax due, and a grand total.

Why can't they do that with gas receipts?  If the excise, sales, and other taxes were listed out, people might realize that it's not the gas station that's making a lot of money from high gas prices.  Heck, even the evil petroleum companies aren't making that much more than they were when gas was retailing for $2 a gallon.  But I guarantee that the huge percentage of tax that's paid on each and every dollar spent on fuel would cause even the biggest VW Beetle driving hippie to scream in frustration at the pump and slap a Gadsden Flag sticker on the bumper.

7 comments:

MrG's said...

Agreed, same principle goes with people knowing how much they pay in taxes. You will get the "I got $$$ back, but no clue how much they actually paid. If we had to write a tax for the full burden of taxes on April 15, the jerks in office wouldn't have been able to run the budget up on us. Witholding is a democrats best friend next to unions...

Shepherd K said...

Federal gas tax is 18.4 cents for unleaded and 24.4 cents for diesel. State tax varies from 0 cents in Alaska to 46.1 cents for unleaded in California. Those figures are as of July 2009.

A barrel of crude is 42 gallons. At $100 a barrel for crude, about $2.38/gallon of gas is just the cost of the oil itself (42 gallons of crude doesn't get exactly 42 gallons of gas, but it's close). Drilling more oil gets supply up which helps with the cost. However, that's just part of the equation.

The cost of actually refining the crude to gas is difficult to measure, but I can tell you most estimates indicate that the existing refineries are running pretty close to full capacity and there hasn't been a new one built in 30 years. So, even if we drill here and drill now, there is an upper limit to how much gas can be produced. Adding a refinery or two would ease that burden and the cost since newer technology could be employed for greater efficiency and cost savings. Bear in mind that companies will not build an overabundance of capacity into the system, but it's safe to say there is some room for growth here.

The last pieces of the puzzle are the transportation and retailing costs. The oil has to get from the rig to the refinery and from there to the gas station. That ain't free either. I don't remember the exact percentages, but fuel transport costs accounted for something like 10% of the cost of a gallon. The poor retailers are really getting the shaft though. They might make 3 to 10 cents a gallon which is less than a 10% margin before adding in transaction costs (7% for most credit cards) and operating costs. If you don't come in to buy some overpriced snacks or coffee, they're barely breaking even.

Jennifer said...

Unfortunately, most of the register systems don't allow for that. I'm not sure the fuel companies are even allowed to disclose that information in that fashion, but it would prevent a lot of angry phone calls. And the cost involved with people defacing the fuel pumps themselves in protest.
Full Disclosure: I work in the corporate office of one of the large chain fuel stops.

Ruth said...

http://www.commonsensejunction.com/notes/gas-tax-rate.html

Tax rates as of Jan 2011, not cool.

DaddyBear said...

Thanks guys. Wow, I knew it was bad, but I didn't think it was that bad. In Kentucky, in order to fill up the 20 gallon tank on the minivan, which I do on average every 5 days, I'm paying $8.18 in taxes. That's 73 fillups every year, which costs me $597.14. That's just the gas it takes to do the stuff I do every day like drive to work and back. If we take a trip or whatever, it adds to that total. I probably spend about 2/3 of that to keep the Irish Woman's car gassed up, for $386.62, and about the same for the truck.

So in gas taxes alone, we're spending almost $1400.00 just to get back and forth to work and the grocery store. To put that in other terms, At $3.85 a gallon, that's 364 gallons of gas, or a little more than 18 tanks of gas. That's more than 1/4 of the gas I will burn in the minivan in a year.

Ruth said...

If you're still paying under $4 a gallon I'm movin' in. I put gas in my tank on Wednesday at $4.03 a gallon at the cheapest place I could find without going out of my way.

DaddyBear said...

The prices around here fall somewhere between $3.81 a gallon at the gas station near my work to $4.02 a gallon closer to home. Interestingly enough, the price of gas hasn't been jacked up to astronomical levels during the Kentucky Derby. Usually it goes up at least 25 cents a gallon this weekend. Guess they think they've found the threshold of pain for the market around here.

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