WATCH THE VIDEO VERSION! http://www.youtube.com/watch?v=ujZeHCfTTtk What goes into the price of gasoline? Gasoline is a commodity that most of us use everyday but ask the average person on the street what goes into the price per gallon and you'll likely get a confused look. In this presentation we'll unveil what really goes into the price you pay for gasoline.

1. Why Does A Gallon of Gas Cost So Much?
Here is why gas prices are here to stay… and
two ways to protect your wealth (even profit!)
from high prices at the pump.
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2. What factors decide the price of gasoline?

3. Some popular misconceptions are…
Large oil companies and local
gas station owners raise prices
just to make a quick buck.
Gas prices are solely
controlled by the
monopoly power of the
Middle East, which
supplies mass quantities
of oil to countries
Stock traders, often referred to
around the world.
as ‘speculators’, bid the price of
oil up, resulting in higher fuel
costs for consumers.

4. These factors determine the price of gasoline per gallon.

5. 11% of the cost per gallon goes to taxes. This includes federal,
state and, depending on where you live, sales tax too.

6. Distribution and marketing make up for 5% of the total cost per gallon. This
is the cost of building pipelines, advertising, and transporting gas and oil.

7. …
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Refining makes up 12% of
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the cost. This is the process of
turning crude oil into gasoline.
Out of one barrel of oil, about 45% Large oil companies
becomes the stuff you pump into your gas like Exxon, Chevron
tank, depending on the quality of oil and
and BP often buy
crude oil on the open
what’s usable. The rest of that barrel is market to supply their
transformed into different hydrocarbon- own refineries, for
based fluids and chemicals.
logistical reasons.
U.S. refineries process blends of
gasoline that have to meet clean air
policies. These blends are confined to
certain regions. For example, you
can’t sell Los Angeles gasoline in
Seattle, or Seattle gasoline in Chicago.

8. Crude oil accounts for 72% of the cost your
local gas station charges. When the price of
oil rises so does the price of gasoline.
Remember that oil is a product traded
in a world market. With everyone
bidding on the same barrels of oil,
prices steadily rise.
So even though the U.S’s demand for oil
may decrease, China and India’s demand
may increase, thus raising the price that
everyone has to pay for it.

9. With reserves of easy to Extracting oil in these places
acquire oil running low, requires more energy and
companies must obtain oil in leads to higher oil prices.
tar sands, in shale, or offshore.

10. An area that often gets blamed for the rising price of
crude oil is too much “speculation” in the market place.
The news might tell you that “speculation” is where big
shot Wall Street bankers bidding the price of oil higher
is resulting in higher fuel costs. But that’s not the case.
For example, the crisis in Iran has the entire oil industry
worried. Iran is the 4th largest oil producer and
controls access to the Strait of Hormuz which serves as
a passageway for 20% of the world’s oil and 90% of all
daily oil shipments from the Middle East.
Oil traders anticipate that a war in Iran would likely
disrupt the supply of oil from the Middle East and
cause a greater spike in the price per barrel. So
naturally, buyers will pay a little more for oil now
before it skyrockets in the future.
That’s what speculation is… buyers and sellers trying
to estimate what prices will be in the future based on
what’s happening in the world. But it’s the news that’s
really driving the price.

11. Perhaps the biggest factor affecting the price of crude oil is
inflation. Worldwide oil is priced in US dollars -- so as the
value of the dollar decreases the price of oil increases.
Over the past 50 years, the dollar has lost 87% of its purchasing power.
This is the biggest reason why you have to pay $4 for a gallon of gas
today when it would have cost you 50 cents fifty years ago.

12. What can you do to lessen the impact you feel at the pump?
If rising oil prices are inevitable, take advantage of it.

13. Tip #1
Invest in companies that transport oil
and gas. These companies make more
money when the price of oil increases
and in turn will earn you profits.
Tip #2
Invest in large integrated oil and gas
producers. These are the companies
out there finding and producing crude
oil. As the price for crude oil goes up,
their share price should follow.

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To watch this as a video presentation visit the link below