Money Down the Pump: Where Does Our Gas Money Go?
Rising gas prices have been in the news the past couple of years, as it seems the price of gas will never fall back down to what it used to be. The last time I filled up my tank, it cost me around $50 (on empty) and regardless of the fuel efficiency of my car, I know I am not the only person who is frustrated by how much money we are spending on personal transportation.
According to a new report, the Union of Concerned Scientists (UCS), explain exactly what our gas dollars actually goes to. In my case of a $50 fill up, the UCS show that $33 of my total went to crude oil, $20 of which went to private oil companies, and $13 to government-run oil companies, the remaining dollars to the gas station — a break-down that I would not have expected.
The UCS has examined how our gas dollars are distributed among all parties involved and conclude that a huge percentage of money spent at the pump go to oil companies, not our local gas station businesses, which one might assume.
Three of the biggest oil companies are British Petroleum, ExxonMobil, and Royal Dutch Shell who reaped more than $130 billion in profits for 2011.
Gas stations, on the other hand, have averaged only three to five cents of profit from each gallon of gasoline sold over the past five years. So these "local" businesses are not really making that much- instead they make more profit from other services that they might provide like having an attached convenient store, car wash, or auto body shop.
The United States is the largest consumer of crude oil in the world processing over 5.4 billion barrels of crude oil just last year. This will subsequently be on the rise if alternative energy use is not accepted.
With gas becoming increasingly expensive, the Union of Concerned Scientists urges us to reduce our oil consumption as part of a smart fiscal strategy.
The study concludes that when it comes to oil, we have a right to choose efficiency. Reducing oil use is not only about choosing a fuel-efficient vehicle, but it is about car maintenance as well. When cars are well-maintained and have properly inflated and aligned tires, fuel is conserved. Also following speed limits can also cut fuel use where driving at 65 miles per hour as opposed to 75 mph can further cut fuel use up to 20%.
For more information on where your gas money goes, read the report published by the Union of Concerned Scientists.
Money down the pump image via Shutterstock.