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Where Goes the $4.00 You Pay for a Gallon of Gasoline?

It seems any other time Jerry and I would have found it necessary to travel a lot would have been a better time than now. We are spending a fortune on fuel as we run here and there, and the subject of gasoline and diesel prices is on the lip of everyone we meet. So….I was intrigued today by this article from the Chicago Tribune that analyzes the $4.00 we plunk down for every gallon of the oily stuff we pump into our tanks.

The average price for gasoline on Long Island is at a record-setting $3.791 a gallon for regular, says the AAA. And diesel? Fuhgeddaboutit: It averaged $4.648 a gallon.

But where is all that cash going?

59.6 cents a gallon goes to state and federal taxes — of which Uncle Sam gets 18.4 cents a gallon, and the remainder goes to Uncle David in Albany; 26.2 cents a gallon pays for refining crude oil; and another 11.2 cents a gallon goes to distribution and marketing.

And, yes, except for the taxes, each of those items includes profit for the oil industry, Dougher said. Last year’s tally was about $123 billion.

But the industry, including Dougher, hastens to point out that those numbers represent a rate of return of only 8.3 cents per dollar of company revenue — a rate lower than those of the beverage, tobacco, pharmaceutical, computer, electronic and chemical industries.

According to Ray Dougher, an economist for the American Petroleum Institute, crude oil accounted for 74 cents of every dollar consumers paid for gas, which would work out to $2.765 a gallon, based on yesterday’s New York State average of $3.736 for regular. Dougher added that the rest breaks down as such:

59.6 cents a gallon goes to state and federal taxes — of which Uncle Sam gets 18.4 cents a gallon, and the remainder goes to Uncle David in Albany; 26.2 cents a gallon pays for refining crude oil; and another 11.2 cents a gallon goes to distribution and marketing.

And, yes, except for the taxes, each of those items includes profit for the oil industry, Dougher said. Last year’s tally was about $123 billion.

But the industry, including Dougher, hastens to point out that those numbers represent a rate of return of only 8.3 cents per dollar of company revenue — a rate lower than those of the beverage, tobacco, pharmaceutical, computer, electronic and chemical industries.

Those who don’t buy that argument are not alone. And they’ll be outraged again this week when Exxon Mobil, Chevron and Marathon Oil announce how much they made in the first three months of this year.

I’m not an economist, nor an oil tycoon or driller, nor a naturalist, nor a developer. I’m just a consumer whose wallet is suffering because of these prices. Can’t something be done? I ask.

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