4 Factors in Fuel Pricing

Gasoline prices in California are primarily influenced by four factors, according to oil industry experts.

Crude oil: The cost of crude--unrefined oil pumped from the ground--accounts for 41% of the price of a typical gallon of gas. Nearly half the crude supplied to California refineries comes from within the state, but in recent years more and more foreign oil has been used. Overseas supplies can be volatile, depending on international events, wars and labor disputes. Crude is traded as a commodity, and as the price of a standard 42-gallon barrel goes up and down, so does the price of gas.

Taxes: Taxes represent about 30% of the cost motorists pay at the gas pump. In California, federal and state excise taxes add about 36 cents to each gallon. In addition, municipalities charge a sales tax: Los Angeles County adds 8.25 cents a gallon; Orange, Riverside and San Diego counties add 7.75 cents; and Ventura County adds 7.25 cents.

Refining: The industrial process that turns crude into gasoline makes up about 16% of the cost of a gallon of gas. In California, refining costs include an additional 5 cents to 8 cents per gallon to produce the nation’s cleanest-burning gasoline.

Distribution and marketing: This element, which represents about 13% of the cost of a gallon of gas, includes oil company transportation, fees, wages, supplies, insurance, advertising and profits.