Maybe they're making it up in volume (LOL)
If oil at $75 a barrel results in a gasoline cost of $1.68 per gallon before
refining cost, transportation & storage costs, profit, and taxes, then
equivalent cost with oil at $3 a barrel would be $0.067 per gallon of gas.
Don't confuse the unrefined COST with the PRICE at the pump.
Lance
> More fun...
>
> In 1955 oil was a bit less than $3 a barrel and gas was $.30 a gallon
> Maintaining that ratio, with oil at $75 a barrel, gas should be $7.50
> a gallon.
>
> But it's only $3.30 a gallon.
>
> What am I missing?
>
> Bryan
>
>
> joseph lance wrote:
>> An article in the May 22nd issue of AutoWeek, page 8, gives the following
>> data:
>>
>> A 42 gallon barrel of crude oil yields 44.77 gallons of refined oil
>> (volume
>> changes). Of this, 43.9% or 19.65 gallons is gasoline and 22.4% or 10.03
>> gallons is diesel/fuel oil.
>>
>> At $75 per barrel of crude oil,unrefined gasoline costs $1.68/gal and
>> diesel
>> is $1.67/gal. Adding the Federal tax (18.4 cents per gallon for gasoline,
>> 24
>> cents for diesel) we get:
>>
>> costs = $1.864/gallon of gas, $1.91/ gallon of diesel
>>
>> Now add state and local taxes, refining costs, additive costs,
>> transportation
>> & storage costs, and profit to get the PRICE we pay at the pump.
>>
>>
>> Lance
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