The Price Behind the Pump

By: Tara Hettinger
By: Tara Hettinger

"It's ridiculous... I think its just taking advantage of us," said consumer Janice Stilts.

With gas prices nearing 3 dollars a gallon many of you are wondering how gas stations are coming up with the price.

"Guys down the street," said co-owner of Chevron Julie Curran.

"We jump because everyone else jumps," said Chevron owner Rich Curran.

The truth is that the gas stations themselves have very little control over the prices.

"We don't make money off fuel," said Julie. "I usually only have maybe 4 cents to move up or down."

So if it's not the gas station...

"I have no idea... It's up the ladder somewhere," said Julie.

Here's the breakdown of where your money goes when you buy a gallon of gas:

First of all the cost of the crude oil accounts for about 60 percent of the money you spend at the pump. Those prices have been rising steadily on the world market. A barrel of crude cost less than 50 dollars a year ago and now cost more than 70.

About 10 percent of your cost is for refining the gasoline. This cost is skyrocketing because of two factors.

First of all, much of the crude on the market right now isn't of a very good quality. That means it has to be refined more before you can use it.

The second factor is that many of the refineries in the south were destroyed by Hurricane Katrina.

About 11 percent of the cost is for distribution and marketing. This is part of the reason that bowling green is sometimes higher than other areas of the country.

Most of the gas in our area is shipped into either Nashville or Owensboro on barges. From there is it trucked to this area. The higher the gas prices, the more it costs to deliver the gas.

And finally there's the taxes. For every gallon of gas you buy, you pay approximately 35 cents in federal and state taxes.

These store owners say one thing is for certain... The companies higher than them on them on the food chain are going to get their money first no matter what.

"You can't stand up to it... It's impossible," said Rich.

Several states have what are called "mark-up laws" that limit just how much an individual gas station-owner can raise the price of gas.

We've checked with the Kentucky Attorney General's office about this. Representatives from his office say if there is such a law in Kentucky they are not familiar with it.

These "mark-up laws" are different than "price-gouging" laws. "Price-gouging laws" only apply when a business raises its prices during a declared emergency. And no such emergency currently exists.


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