The cost behind a gallon of gas - Jack Kuenzie on the cost of a gallon of gas
(Columbia) Feb. 19, 2003 - When you own a Hummer, you can expect to spend a lot of time and money at the gas station. The Hummer belongs to his brother so Jack Freeman doesn't always have to pay to fill it up, "Fill it up two times and it'd be roughly about a hundred dollars."
Even drivers of efficient vehicles are forking over much more for fuel and many don't know why from, "I guess it's supply and demand with the situation in Iraq, I guess," to, "I think it's a possibility we're just being asked to pay more, because it's a cause and we don't really know what's going on."
Why are gas prices going up so fast? The marketing arm for most of the state's service stations says it's not so much about Iraq, but about the cost of crude oil. A higher price per barrel, a short domestic supply [the shortest in 30 years], a harsh winter weather which has caused a run on heating oil, and disruptions in supplies from countries like Venezuela.
Prices at your favorite station might be shooting up every few days because retailers are seeing dramatic increases in their costs. Sims Floyd with the Petroleum Marketers Association says every time the tanker trucks stop in to refill the station's gas supply, "Typically in metro location you've got 16 to 20 thousand gallons underground. And in an urban setting you can turn that entire product in two to three days."
The marketers say dealer profits are razor thin. Seventy-eight cents goes for the cost of crude out of the amount you now pay for a gallon of gas in South Carolina. Thirty-five cents to to federal and state taxes. Thirty-nine cents for refining, distribution and marketing, which leaves about three cents profit for the dealer.
The petroleum marketers say some gas station owners make more money selling a cup of coffee than they do on a tank of gas. That's one reason they want customers to come into the store. South Carolina's average gas price is a $1.55, the fourth lowest average in the nation. One reason is because the Palmetto State has lots of gas stations, several pipelines and terminals close by.