Gasoline prices continue to rise, averaging $3.20
As crude rose to an all time high of $111 a barrel, the average price for gas followed suit, crossing the $3.20 mark for a national average for one gallon of gas, settling in at $3.289 as of Thursday, April 3.
But what goes into gas pricing?
Now perched over $3 per gallon on average nationwide, the U.S. government's official energy statistic office, the Energy Information Agency, notes the cost of crude accounts for almost one-half the price of gasoline, which has added to the price strain of late.
The projected higher costs for crude oil in 2008 are likely to be passed on to all petroleum products, noted the heads of the big five oil companies, Shell Oil Co., Exxon Mobil Corp., BP America Inc., Chevron Corp. and ConocoPhillips Tuesday, April 1, as they testified before a congressional committee discussing the current state of oil and gas prices, renewable fuels and pollution.
The EIA's Short Term Energy Outlook echoed those sentiments, adding that retail prices for gasoline are 40 cents above their 2007 price tag, with the monthly average projected to peak near $3.50 per gallon this spring.
"It is important to note, however, that even if the national average monthly gasoline price peaks near that level, there is a significant possibility that prices during some shorter time period, or in some region or sub-region, will cross the $4 per gallon threshold," stated the EAI document.
In this respect, crude oil prices, which averaged around $70 per barrel in 2007, are now over the $100 per barrel mark and have helped push pump prices into the $3 range.
"The monthly average gasoline price is projected to peak at just under $3.50 per gallon this spring, while diesel prices are expected to average around $3.70 per gallon in March and April," continued the EIA report.
At 53 percent of the gas pricing equation, crude oil is one of the biggest factors to why gas prices rise and fall. Others include refining, making up 24 percent of the price, distribution and marketing at 9 percent and taxes at 15 percent, notes the EIA.
Some external factors that also effect gas pricing, noted the EIA report, include things like unrest in oil producing countries; major supply disruptions in any area of the country; increased consumer demand; expected or unexpected outages at any refinery, and activity on the commodities market.
Closer to home, the Minnesota Department of Energy noted, almost 80 percent of Minnesota's crude oil comes from Canada, the rest from other states and overseas via the Gulf of Mexico.
With refineries running continually at full capacity, the MNDE remarked the state's gas prices at the pump rise with any disruption in refinery operations due to fires or maintenance, routine or otherwise.
Demand is also a factor as two-thirds of the petroleum consumed in Minnesota is used for transportation, with gas consumption up almost 50 percent, drivers averaged 5,540 miles per person in 1980 and 10,549 miles per person in 2000.