It is the holiday season and you just filled your tank. Gas prices can blow the cost for a dinner for four people if you drive a gas-guzzler. Do you think the oil companies get the majority of the profits? Guess again.

As with every commodity, there are several groups in the chain of supply for that product. You will read in the newspaper that the cost at the pump is set by the price of the crude oil. What is crude oil? Simply speaking, it is the petroleum, or the unprocessed oil that comes from the ground.

In January of this year, the United States Department of Energy set a estimated cost of how a dollar’s worth of gas is dived up. It is quite interesting to look at how it all breaks down. Approximately, 67 cents goes to the cost of the crude, refining the crude runs about 7 cents, distribution and marketing comes in at 11 cents, and taxes, depending on where you are run about 15 cents.

As the largest percentage goes to the crude oil suppliers, the world’s exporting nations through OPEC (Organization of Exporting Companies) set the price based on market conditions. As the majority of the imported crude comes from foreign countries, it is another reason to look at the United States becoming energy independent. That is another story.

Gas prices can go up or down even if there is an abundance of crude oil. Crude oil is also categorized by light, heavy, sweet, or sour, (sounds like a dessert). The lighter, sweet crude is easier to refine. Heavier oil costs more to refine in the United States.

The crude oil is ported to refineries, which then process and ship to distribution centers and finally to the gas stations. Transportation costs are passed on to the consumer plus the marketing costs to pay for the ad spots you see. Just think of how many times you saw the brand BP this year!

The state and federal governments place excise taxes on gasoline. Then you add state sales if applicable, oil inspection fees, underground storage fees and other miscellaneous taxes for environmental fees. And don’t forget the gas station mark up. They have to get their cut also. Your lucky you live here as gas in Europe is always a greater cost compared to what we pay here.

Gas prices are a necessary evil. We are a nation of people on the go. Supply and demand dictates and we don’t have a say in the matter.