Good Question: How Much of Your Gas Money Actually Pays for Gas?
It's the inevitable sign of the season: gas prices, rising along with the temperatures. Right now, the average price of a gallon of unleaded in Spokane is $3.69. And, while we can't guess how high prices will go, we can ask how much of that gas money actually ends up paying for gas in your tank?
By the time you get around to complaining about gas prices, they seem to go up again. Drivers who once filled up for $30 now say they're paying close to $50. Unless you want to ride your bike or hop on the bus, you can't avoid it. And, we haven't even topped out yet.
"Traditionally, prices peak at some point in May - whether that's either just before Memorial Day weekend or a day or two after," says Patrick DeHaan from GasBuddy.com. "We typically see prices peak in May, so we do have some room to climb unfortunately."
We had to conduct our interview with DeHaan via Skype; it's much too expensive for the gas money to drive out to Minnesota to interview him in person. And, even though traffic to his gas price tracking website increases dramatically when the price goes up, he doesn't like it any more than you do.
"We don't really benefit from higher prices, we just get more people who are curious about it," said DeHaan.
You can complain all you want, but the bottom line is, these high prices are a reality. We wanted to know how much of what you shell out for gas actually ends up in your tank. This is the part of the story where we'd typically put up a big blue graphic on the screen that breaks down the price. But, because we like to think outside the box - and, because I'm 7 months pregnant - we're choosing to explain this with frozen yogurt.
The frozen yogurt itself represents the gas - how much raw material are you actually putting in your car. It ends up being about 60 percent of the cost per gallon. The strawberries we used as the first topping represent the refining cost; how much it costs to get the gas from the oil rig into your car. That represents about 20% of your cost per gallon. The second topping - gummy bears - represent another big component of what you pay for gas - taxes. Washington has one of the highest gas taxes in the country, in Idaho, you'll pay a little less. Overall, taxes account for about about 18%. Now, for the cherry on top - the profits the gas stations are making off what you put in your tank. The truth is, it's not much - only about 2 percent.
Clearly, the men and women you see at the pump aren't the ones cashing in.
"Whoever's closest to the oil," said DeHaan when we asked who is raking in the real profits here. "The oil companies are making the most, then the refining companies - then it really trickles down from there."
Regardless of who gets that money, you'll likely be paying more of it until the prices slip down again. The good news? DeHaan doesn't see prices above $5.00 a gallon in our immediate future.
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