This is the accessible text file for GAO report number GAO-05-525SP 
entitled 'Motor Fuels: Understanding the Factors that Influence the 
Retail Price of Gasoline' which was released on May 24, 2005.

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United States Government Accountability Office:

Motor Fuels: Understanding the Factors that Influence the Retail Price 
of Gasoline:

GAO-05-525SP:

May 2005:

Contents:

Abbreviations:

Preface:

Section 1: Background:

How much of a barrel of oil is made into gasoline?

How does gasoline get to the consumer?

How have gasoline prices changed over time?

Section 2: Elements Of Gasoline Price:

What do consumers pay for in a gallon of gasoline?
Crude Oil:
Taxes:
Refining:

Distribution and Marketing:

Section 3: Variations In Gasoline Prices Over Time:

What are the key factors causing gasoline prices to change over time?

What determines the price of crude oil?
World Oil Demand:
World Oil Supply:

How do changes in gasoline demand relative to supply affect the price?

Can U.S. refineries produce as much gasoline as consumers demand?

How does the United States balance gasoline supply and demand?

How have government requirements for special blends of gasoline 
affected the price of gasoline?

Why are gasoline prices generally higher during certain times of the 
year?

How have gasoline taxes contributed to changes in gasoline price over 
time?

How have the mergers that occurred in the petroleum industry in the 
1990s affected competition and the price of gasoline?

Section 4: Geographic Variations In Gasoline Price:

Why do gasoline prices vary from place to place?

How does proximity to the source of supply affect the price of gasoline?

How do differences in the types of gasoline used cause geographic 
variations in gasoline price?

How do geographic differences in taxes affect gasoline prices?

How does local competition affect gasoline prices?

How does competition between name-brand and unbranded gasoline affect 
price?

Appendix I: Scope And Methodology:

Related Gao Products:

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. However, because 
this work may contain copyrighted images or other material, permission 
from the copyright holder may be necessary if you wish to reproduce 
this material separately.

ABBREVIATIONS:

API: American Petroleum Institute:

BLS: Bureau of Labor Statistics:

EIA: Energy Information Administration:

FTC: Federal Trade Commission:

OPEC: Organization of Petroleum Exporting Countries:

SUV: sport utility vehicle:

PREFACE:

Few things generate more attention and anxiety among American consumers 
than the price of gasoline. Periods of price increases are accompanied 
by high levels of media attention and consumer questioning about the 
causes and impacts of the price changes. The most recent upsurge in 
prices is no exception. Between January 3 and April 11, 2005, gasoline 
prices increased nearly every week, and during this time the average 
U.S. price for regular unleaded gasoline jumped 50 cents per gallon, 
adding about $7.8 billion to consumers' total gasoline bill, or about 
$58 for each passenger car in the United States. Spending billions more 
on gasoline pinched consumer budgets, leaving less money available for 
other purchases.

Beyond having concerns over price increases, consumers find it 
difficult to understand how prices can vary so much across the country 
or even from neighborhood to neighborhood. For example, consumers in 
San Francisco paid an average of $2.63 per gallon during the week of 
April 11, 2005, while consumers in Chicago paid $2.33 per gallon; in 
Denver, $2.25; in New York, $2.19; and in Houston, $2.12. Within the 
city of Washington, D.C., pump prices for regular gasoline varied by as 
much as 22 cents per gallon among the stations that we visited.

Over the years, these issues have been the subject of numerous 
investigations and reports. We at GAO have testified multiple times on 
related issues in congressional hearings. Often reports on gasoline 
prices have been technical, leaving basic questions unanswered. We 
prepared this primer to help improve public understanding of the major 
factors that influence the U.S. price of gasoline and the challenges 
facing the United States on issues related to gasoline supply, demand, 
and prices. In the primer, we present information on the factors that 
influence the price of gasoline and, to the extent possible, why those 
factors have developed. Specifically, we explain how gasoline is made 
and distributed, what consumers pay for in a gallon of gasoline, why 
gasoline prices change over time, and why gasoline prices vary from 
place to place.[Footnote 1] The information is presented in a question- 
and-answer format and is written for a non-technical audience.

In preparing this primer, we analyzed gasoline market trends and 
conditions, using the most up-to-date information available from the 
Department of Energy's Energy Information Administration (EIA) and 
other sources.[Footnote 2] Because not all of the available information 
covers the same time periods, there is some variance in the periods 
covered in the many charts and graphs presented in this primer; 
however, we have identified the applicable time period for each chart 
and graph. In addition to analyzing data, we talked extensively with 
oil market representatives and experts and also drew upon our 
previously issued work on oil and gasoline markets and work by other 
entities. More information on the scope and methodology of our work is 
presented in appendix 1.

If you have questions about this primer, please contact me at (202) 512-
3841.

Key contributors to this report include Godwin Agbara, Mark Metcalfe, 
Cynthia Norris, Rob Hardison, Kim Raheb, and Sandra Edwards. Copies of 
this primer are available upon request. In addition, it is available at 
no charge on the GAO Web site at http://www.gao.gov.

Signed by:

Jim Wells:

Director, Natural Resources and Environment:

SECTION 1: BACKGROUND:

Q. How much of a barrel of oil is made into gasoline?

A. Gasoline is one of several petroleum products made by refining crude 
oil. As Figure 1 shows, on average, gasoline constitutes almost half of 
the total petroleum products derived from a barrel of crude oil, 
although the amount of gasoline that can be produced from a barrel of 
crude oil varies among individual refineries.

Figure 1: Products Made from a Barrel of Crude Oil (Average for 2000 to 
2004):

[See PDF for image] -graphic text:

Pie graph with six items.

Gasoline: 46.7%; 
Diesel fuel and heating oil: 23.5%; 
Other products[A]: 21.8%; 
Jet fuel: 9.8%; 
Heavy fuel oil: 4.3%; 
Liquefied petroleum gas (LPG): 4.3%.

Source: GAO analysis of EIA data.

Notes: A barrel containing 42 U.S. gallons of crude oil yields slightly 
more than 44 gallons of petroleum products. This "process gain" in 
volume is due to a reduction in density during the refining process. As 
a result, percentages total more than 100 percent.

[A] Other products include petroleum coke, still gas, asphalt and road 
oil, petrochemical feedstock, lubricants, etc.

[End of figure]

Overall, the amount of gasoline a refiner can produce from a barrel of 
crude oil depends, in part, on the configuration (sophistication) of 
the refinery. More sophisticated refineries can squeeze more gasoline 
out of a given barrel of crude oil than less sophisticated ones. 
Refineries in the United States are among the most sophisticated in the 
world. The amount of gasoline produced also depends on the quality of 
crude oil: light crude oil, which is generally low in sulfur, can yield 
more gasoline than heavy crude oil, which tends to be high in 
sulfur.[Footnote 3]

Q. How does gasoline get to the consumer?

A. As Figure 2 shows, gasoline reaches the consumer through a complex 
system that begins with extracting crude oil and transporting it to 
refineries, mostly via pipelines, marine tankers, and barges. [Footnote 
4] At the refineries, crude oil is processed into gasoline and other 
petroleum products. The gasoline is then transported--again, usually 
via pipelines, marine tankers, and barges--to storage terminals for 
wholesale distribution. From there, it is shipped by truck to retail 
stations, where consumers pull up to fill their tanks.

Figure 2: Gasoline Production and Distribution System:

[See PDF for image]

Source: GAO.

[End of figure]

Q. How have gasoline prices changed over time?

A. As shown in Figure 3, the average U.S. retail price for gasoline has 
nearly quadrupled since 1974.

Figure 3: U.S. Retail Price of Gasoline (1974-2004):

[See PDF for image] -graphic text:

Line graph with 371 items.

Month: January 1974; Dollars per gallon: $0.47.
Month: February 1974; Dollars per gallon: $0.49.
Month: March 1974; Dollars per gallon: $0.53.
Month: April 1974; Dollars per gallon: $0.54.
Month: May 1974; Dollars per gallon: $0.55.
Month: June 1974; Dollars per gallon: $0.56.
Month: July 1974; Dollars per gallon: $0.56.
Month: August 1974; Dollars per gallon: $0.55.
Month: September 1974; Dollars per gallon: $0.55.
Month: October 1974; Dollars per gallon: $0.53.
Month: November 1974; Dollars per gallon: $0.53.
Month: December 1974; Dollars per gallon: $0.53.
Month: January 1975; Dollars per gallon: $0.53.
Month: February 1975; Dollars per gallon: $0.53.
Month: March 1975; Dollars per gallon: $0.53.
Month: April 1975; Dollars per gallon: $0.54.
Month: May 1975; Dollars per gallon: $0.55.
Month: June 1975; Dollars per gallon: $0.57.
Month: July 1975; Dollars per gallon: $0.59.
Month: August 1975; Dollars per gallon: $0.60.
Month: September 1975; Dollars per gallon: $0.60.
Month: October 1975; Dollars per gallon: $0.59.
Month: November 1975; Dollars per gallon: $0.59.
Month: December 1975; Dollars per gallon: $0.59.
Month: January 1976; Dollars per gallon: $0.61.
Month: February 1976; Dollars per gallon: $0.60.
Month: March 1976; Dollars per gallon: $0.59.
Month: April 1976; Dollars per gallon: $0.59.
Month: May 1976; Dollars per gallon: $0.60.
Month: June 1976; Dollars per gallon: $0.62.
Month: July 1976; Dollars per gallon: $0.62.
Month: August 1976; Dollars per gallon: $0.63.
Month: September 1976; Dollars per gallon: $0.63.
Month: October 1976; Dollars per gallon: $0.63.
Month: November 1976; Dollars per gallon: $0.63.
Month: December 1976; Dollars per gallon: $0.63.
Month: January 1977; Dollars per gallon: $0.63.
Month: February 1977; Dollars per gallon: $0.64.
Month: March 1977; Dollars per gallon: $0.64.
Month: April 1977; Dollars per gallon: $0.65.
Month: May 1977; Dollars per gallon: $0.66.
Month: June 1977; Dollars per gallon: $0.67.
Month: July 1977; Dollars per gallon: $0.67.
Month: August 1977; Dollars per gallon: $0.67.
Month: September 1977; Dollars per gallon: $0.67.
Month: October 1977; Dollars per gallon: $0.67.
Month: November 1977; Dollars per gallon: $0.66.
Month: December 1977; Dollars per gallon: $0.67.
Month: January 1978; Dollars per gallon: $0.65.
Month: February 1978; Dollars per gallon: $0.65.
Month: March 1978; Dollars per gallon: $0.65.
Month: April 1978; Dollars per gallon: $0.65.
Month: May 1978; Dollars per gallon: $0.66.
Month: June 1978; Dollars per gallon: $0.66.
Month: July 1978; Dollars per gallon: $0.67.
Month: August 1978; Dollars per gallon: $0.68.
Month: September 1978; Dollars per gallon: $0.69.
Month: October 1978; Dollars per gallon: $0.69.
Month: November 1978; Dollars per gallon: $0.70.
Month: December 1978; Dollars per gallon: $0.71.
Month: January 1979; Dollars per gallon: $0.72.
Month: February 1979; Dollars per gallon: $0.73.
Month: March 1979; Dollars per gallon: $0.76.
Month: April 1979; Dollars per gallon: $0.80.
Month: May 1979; Dollars per gallon: $0.84.
Month: June 1979; Dollars per gallon: $0.90.
Month: July 1979; Dollars per gallon: $0.95.
Month: August 1979; Dollars per gallon: $0.99.
Month: September 1979; Dollars per gallon: $1.02.
Month: October 1979; Dollars per gallon: $1.03.
Month: November 1979; Dollars per gallon: $1.04.
Month: December 1979; Dollars per gallon: $1.07.
Month: January 1980; Dollars per gallon: $1.13.
Month: February 1980; Dollars per gallon: $1.21.
Month: March 1980; Dollars per gallon: $1.25.
Month: April 1980; Dollars per gallon: $1.26.
Month: May 1980; Dollars per gallon: $1.27.
Month: June 1980; Dollars per gallon: $1.27.
Month: July 1980; Dollars per gallon: $1.27.
Month: August 1980; Dollars per gallon: $1.27.
Month: September 1980; Dollars per gallon: $1.26.
Month: October 1980; Dollars per gallon: $1.25.
Month: November 1980; Dollars per gallon: $1.25.
Month: December 1980; Dollars per gallon: $1.26.
Month: January 1981; Dollars per gallon: $1.30.
Month: February 1981; Dollars per gallon: $1.38.
Month: March 1981; Dollars per gallon: $1.42.
Month: April 1981; Dollars per gallon: $1.41.
Month: May 1981; Dollars per gallon: $1.40.
Month: June 1981; Dollars per gallon: $1.39.
Month: July 1981; Dollars per gallon: $1.38.
Month: August 1981; Dollars per gallon: $1.38.
Month: September 1981; Dollars per gallon: $1.38.
Month: October 1981; Dollars per gallon: $1.37.
Month: November 1981; Dollars per gallon: $1.37.
Month: December 1981; Dollars per gallon: $1.37.
Month: January 1982; Dollars per gallon: $1.36.
Month: February 1982; Dollars per gallon: $1.33.
Month: March 1982; Dollars per gallon: $1.28.
Month: April 1982; Dollars per gallon: $1.23.
Month: May 1982; Dollars per gallon: $1.24.
Month: June 1982; Dollars per gallon: $1.31.
Month: July 1982; Dollars per gallon: $1.33.
Month: August 1982; Dollars per gallon: $1.32.
Month: September 1982; Dollars per gallon: $1.31.
Month: October 1982; Dollars per gallon: $1.30.
Month: November 1982; Dollars per gallon: $1.28.
Month: December 1982; Dollars per gallon: $1.26.
Month: January 1983; Dollars per gallon: $1.23.
Month: February 1983; Dollars per gallon: $1.19.
Month: March 1983; Dollars per gallon: $1.15.
Month: April 1983; Dollars per gallon: $1.22.
Month: May 1983; Dollars per gallon: $1.26.
Month: June 1983; Dollars per gallon: $1.28.
Month: July 1983; Dollars per gallon: $1.29.
Month: August 1983; Dollars per gallon: $1.29.
Month: September 1983; Dollars per gallon: $1.27.
Month: October 1983; Dollars per gallon: $1.26.
Month: November 1983; Dollars per gallon: $1.24.
Month: December 1983; Dollars per gallon: $1.23.
Month: January 1984; Dollars per gallon: $1.22.
Month: February 1984; Dollars per gallon: $1.21.
Month: March 1984; Dollars per gallon: $1.21.
Month: April 1984; Dollars per gallon: $1.23.
Month: May 1984; Dollars per gallon: $1.24.
Month: June 1984; Dollars per gallon: $1.23.
Month: July 1984; Dollars per gallon: $1.21.
Month: August 1984; Dollars per gallon: $1.20.
Month: September 1984; Dollars per gallon: $1.20.
Month: October 1984; Dollars per gallon: $1.21.
Month: November 1984; Dollars per gallon: $1.21.
Month: December 1984; Dollars per gallon: $1.19.
Month: January 1985; Dollars per gallon: $1.15.
Month: February 1985; Dollars per gallon: $1.13.
Month: March 1985; Dollars per gallon: $1.16.
Month: April 1985; Dollars per gallon: $1.21.
Month: May 1985; Dollars per gallon: $1.23.
Month: June 1985; Dollars per gallon: $1.24.
Month: July 1985; Dollars per gallon: $1.24.
Month: August 1985; Dollars per gallon: $1.23.
Month: September 1985; Dollars per gallon: $1.22.
Month: October 1985; Dollars per gallon: $1.20.
Month: November 1985; Dollars per gallon: $1.21.
Month: December 1985; Dollars per gallon: $1.21.
Month: January 1986; Dollars per gallon: $1.19.
Month: February 1986; Dollars per gallon: $1.12.
Month: March 1986; Dollars per gallon: $0.98.
Month: April 1986; Dollars per gallon: $0.89.
Month: May 1986; Dollars per gallon: $0.92.
Month: June 1986; Dollars per gallon: $0.96.
Month: July 1986; Dollars per gallon: $0.89.
Month: August 1986; Dollars per gallon: $0.84.
Month: September 1986; Dollars per gallon: $0.86.
Month: October 1986; Dollars per gallon: $0.83.
Month: November 1986; Dollars per gallon: $0.82.
Month: December 1986; Dollars per gallon: $0.82.
Month: January 1987; Dollars per gallon: $0.86.
Month: February 1987; Dollars per gallon: $0.91.
Month: March 1987; Dollars per gallon: $0.91.
Month: April 1987; Dollars per gallon: $0.93.
Month: May 1987; Dollars per gallon: $0.94.
Month: June 1987; Dollars per gallon: $0.96.
Month: July 1987; Dollars per gallon: $0.97.
Month: August 1987; Dollars per gallon: $1.00.
Month: September 1987; Dollars per gallon: $0.99.
Month: October 1987; Dollars per gallon: $0.98.
Month: November 1987; Dollars per gallon: $0.98.
Month: December 1987; Dollars per gallon: $0.96.
Month: January 1988; Dollars per gallon: $0.93.
Month: February 1988; Dollars per gallon: $0.91.
Month: March 1988; Dollars per gallon: $0.90.
Month: April 1988; Dollars per gallon: $0.93.
Month: May 1988; Dollars per gallon: $0.96.
Month: June 1988; Dollars per gallon: $0.96.
Month: July 1988; Dollars per gallon: $0.97.
Month: August 1988; Dollars per gallon: $0.99.
Month: September 1988; Dollars per gallon: $0.97.
Month: October 1988; Dollars per gallon: $0.96.
Month: November 1988; Dollars per gallon: $0.95.
Month: December 1988; Dollars per gallon: $0.93.
Month: January 1989; Dollars per gallon: $0.92.
Month: February 1989; Dollars per gallon: $0.93.
Month: March 1989; Dollars per gallon: $0.94.
Month: April 1989; Dollars per gallon: $1.07.
Month: May 1989; Dollars per gallon: $1.12.
Month: June 1989; Dollars per gallon: $1.11.
Month: July 1989; Dollars per gallon: $1.09.
Month: August 1989; Dollars per gallon: $1.06.
Month: September 1989; Dollars per gallon: $1.03.
Month: October 1989; Dollars per gallon: $1.03.
Month: November 1989; Dollars per gallon: $1.00.
Month: December 1989; Dollars per gallon: $0.98.
Month: January 1990; Dollars per gallon: $1.04.
Month: February 1990; Dollars per gallon: $1.04.
Month: March 1990; Dollars per gallon: $1.02.
Month: April 1990; Dollars per gallon: $1.04.
Month: May 1990; Dollars per gallon: $1.06.
Month: June 1990; Dollars per gallon: $1.09.
Month: July 1990; Dollars per gallon: $1.08.
Month: August 1990; Dollars per gallon: $1.19.
Month: September 1990; Dollars per gallon: $1.29.
Month: October 1990; Dollars per gallon: $1.38.
Month: November 1990; Dollars per gallon: $1.38.
Month: December 1990; Dollars per gallon: $1.35.
Month: January 1991; Dollars per gallon: $1.25.
Month: February 1991; Dollars per gallon: $1.14.
Month: March 1991; Dollars per gallon: $1.08.
Month: April 1991; Dollars per gallon: $1.10.
Month: May 1991; Dollars per gallon: $1.16.
Month: June 1991; Dollars per gallon: $1.16.
Month: July 1991; Dollars per gallon: $1.13.
Month: August 1991; Dollars per gallon: $1.14.
Month: September 1991; Dollars per gallon: $1.14.
Month: October 1991; Dollars per gallon: $1.12.
Month: November 1991; Dollars per gallon: $1.13.
Month: December 1991; Dollars per gallon: $1.12.
Month: January 1992; Dollars per gallon: $1.07.
Month: February 1992; Dollars per gallon: $1.05.
Month: March 1992; Dollars per gallon: $1.06.
Month: April 1992; Dollars per gallon: $1.08.
Month: May 1992; Dollars per gallon: $1.14.
Month: June 1992; Dollars per gallon: $1.18.
Month: July 1992; Dollars per gallon: $1.18.
Month: August 1992; Dollars per gallon: $1.16.
Month: September 1992; Dollars per gallon: $1.16.
Month: October 1992; Dollars per gallon: $1.15.
Month: November 1992; Dollars per gallon: $1.16.
Month: December 1992; Dollars per gallon: $1.14.
Month: January 1993; Dollars per gallon: $1.12.
Month: February 1993; Dollars per gallon: $1.11.
Month: March 1993; Dollars per gallon: $1.10.
Month: April 1993; Dollars per gallon: $1.11.
Month: May 1993; Dollars per gallon: $1.13.
Month: June 1993; Dollars per gallon: $1.13.
Month: July 1993; Dollars per gallon: $1.11.
Month: August 1993; Dollars per gallon: $1.10.
Month: September 1993; Dollars per gallon: $1.09.
Month: October 1993; Dollars per gallon: $1.13.
Month: November 1993; Dollars per gallon: $1.11.
Month: December 1993; Dollars per gallon: $1.07.
Month: January 1994; Dollars per gallon: $1.04.
Month: February 1994; Dollars per gallon: $1.05.
Month: March 1994; Dollars per gallon: $1.05.
Month: April 1994; Dollars per gallon: $1.06.
Month: May 1994; Dollars per gallon: $1.08.
Month: June 1994; Dollars per gallon: $1.11.
Month: July 1994; Dollars per gallon: $1.14.
Month: August 1994; Dollars per gallon: $1.18.
Month: September 1994; Dollars per gallon: $1.18.
Month: October 1994; Dollars per gallon: $1.15.
Month: November 1994; Dollars per gallon: $1.16.
Month: December 1994; Dollars per gallon: $1.14.
Month: January 1995; Dollars per gallon: $1.13.
Month: February 1995; Dollars per gallon: $1.12.
Month: March 1995; Dollars per gallon: $1.12.
Month: April 1995; Dollars per gallon: $1.14.
Month: May 1995; Dollars per gallon: $1.20.
Month: June 1995; Dollars per gallon: $1.23.
Month: July 1995; Dollars per gallon: $1.20.
Month: August 1995; Dollars per gallon: $1.16.
Month: September 1995; Dollars per gallon: $1.15.
Month: October 1995; Dollars per gallon: $1.13.
Month: November 1995; Dollars per gallon: $1.10.
Month: December 1995; Dollars per gallon: $1.10.
Month: January 1996; Dollars per gallon: $1.13.
Month: February 1996; Dollars per gallon: $1.12.
Month: March 1996; Dollars per gallon: $1.16.
Month: April 1996; Dollars per gallon: $1.25.
Month: May 1996; Dollars per gallon: $1.32.
Month: June 1996; Dollars per gallon: $1.30.
Month: July 1996; Dollars per gallon: $1.27.
Month: August 1996; Dollars per gallon: $1.24.
Month: September 1996; Dollars per gallon: $1.23.
Month: October 1996; Dollars per gallon: $1.23.
Month: November 1996; Dollars per gallon: $1.25.
Month: December 1996; Dollars per gallon: $1.26.
Month: January 1997; Dollars per gallon: $1.26.
Month: February 1997; Dollars per gallon: $1.26.
Month: March 1997; Dollars per gallon: $1.24.
Month: April 1997; Dollars per gallon: $1.23.
Month: May 1997; Dollars per gallon: $1.23.
Month: June 1997; Dollars per gallon: $1.23.
Month: July 1997; Dollars per gallon: $1.21.
Month: August 1997; Dollars per gallon: $1.25.
Month: September 1997; Dollars per gallon: $1.28.
Month: October 1997; Dollars per gallon: $1.24.
Month: November 1997; Dollars per gallon: $1.21.
Month: December 1997; Dollars per gallon: $1.18.
Month: January 1998; Dollars per gallon: $1.13.
Month: February 1998; Dollars per gallon: $1.08.
Month: March 1998; Dollars per gallon: $1.04.
Month: April 1998; Dollars per gallon: $1.05.
Month: May 1998; Dollars per gallon: $1.09.
Month: June 1998; Dollars per gallon: $1.09.
Month: July 1998; Dollars per gallon: $1.08.
Month: August 1998; Dollars per gallon: $1.05.
Month: September 1998; Dollars per gallon: $1.03.
Month: October 1998; Dollars per gallon: $1.04.
Month: November 1998; Dollars per gallon: $1.03.
Month: December 1998; Dollars per gallon: $0.99.
Month: January 1999; Dollars per gallon: $0.97.
Month: February 1999; Dollars per gallon: $0.96.
Month: March 1999; Dollars per gallon: $0.99.
Month: April 1999; Dollars per gallon: $1.18.
Month: May 1999; Dollars per gallon: $1.18.
Month: June 1999; Dollars per gallon: $1.15.
Month: July 1999; Dollars per gallon: $1.19.
Month: August 1999; Dollars per gallon: $1.26.
Month: September 1999; Dollars per gallon: $1.28.
Month: October 1999; Dollars per gallon: $1.27.
Month: November 1999; Dollars per gallon: $1.26.
Month: December 1999; Dollars per gallon: $1.30.
Month: January 2000; Dollars per gallon: $1.30.
Month: February 2000; Dollars per gallon: $1.37.
Month: March 2000; Dollars per gallon: $1.54.
Month: April 2000; Dollars per gallon: $1.51.
Month: May 2000; Dollars per gallon: $1.50.
Month: June 2000; Dollars per gallon: $1.62.
Month: July 2000; Dollars per gallon: $1.59.
Month: August 2000; Dollars per gallon: $1.51.
Month: September 2000; Dollars per gallon: $1.58.
Month: October 2000; Dollars per gallon: $1.56.
Month: November 2000; Dollars per gallon: $1.56.
Month: December 2000; Dollars per gallon: $1.49.
Month: January 2001; Dollars per gallon: $1.47.
Month: February 2001; Dollars per gallon: $1.48.
Month: March 2001; Dollars per gallon: $1.45.
Month: April 2001; Dollars per gallon: $1.56.
Month: May 2001; Dollars per gallon: $1.73.
Month: June 2001; Dollars per gallon: $1.64.
Month: July 2001; Dollars per gallon: $1.48.
Month: August 2001; Dollars per gallon: $1.43.
Month: September 2001; Dollars per gallon: $1.53.
Month: October 2001; Dollars per gallon: $1.36.
Month: November 2001; Dollars per gallon: $1.26.
Month: December 2001; Dollars per gallon: $1.13.
Month: January 2002; Dollars per gallon: $1.14.
Month: February 2002; Dollars per gallon: $1.13.
Month: March 2002; Dollars per gallon: $1.24.
Month: April 2002; Dollars per gallon: $1.41.
Month: May 2002; Dollars per gallon: $1.42.
Month: June 2002; Dollars per gallon: $1.40.
Month: July 2002; Dollars per gallon: $1.41.
Month: August 2002; Dollars per gallon: $1.42.
Month: September 2002; Dollars per gallon: $1.42.
Month: October 2002; Dollars per gallon: $1.45.
Month: November 2002; Dollars per gallon: $1.45.
Month: December 2002; Dollars per gallon: $1.39.
Month: January 2003; Dollars per gallon: $1.47.
Month: February 2003; Dollars per gallon: $1.64.
Month: March 2003; Dollars per gallon: $1.75.
Month: April 2003; Dollars per gallon: $1.66.
Month: May 2003; Dollars per gallon: $1.54.
Month: June 2003; Dollars per gallon: $1.51.
Month: July 2003; Dollars per gallon: $1.52.
Month: August 2003; Dollars per gallon: $1.63.
Month: September 2003; Dollars per gallon: $1.73.
Month: October 2003; Dollars per gallon: $1.60.
Month: November 2003; Dollars per gallon: $1.54.
Month: December 2003; Dollars per gallon: $1.49.
Month: January 2004; Dollars per gallon: $1.59.
Month: February 2004; Dollars per gallon: $1.67.
Month: March 2004; Dollars per gallon: $1.77.
Month: April 2004; Dollars per gallon: $1.83.
Month: May 2004; Dollars per gallon: $2.01.
Month: June 2004; Dollars per gallon: $2.04.
Month: July 2004; Dollars per gallon: $1.94.
Month: August 2004; Dollars per gallon: $1.90.
Month: September 2004; Dollars per gallon: $1.89.
Month: October 2004; Dollars per gallon: $2.03.
Month: November 2004; Dollars per gallon: $2.01.

Source: GAO analysis of Bureau of Labor Statistics (BLS) data.

Note: Price data are monthly U.S. city averages for regular gasoline. 
Prices in 1974 and 1975 are for leaded gasoline, and prices for 1976 
onward are for unleaded gasoline.

[End of figure]

However, as shown in Figure 4, the average U.S. retail gasoline price 
adjusted for inflation was actually substantially lower in 2004 than it 
was during its peak in 1981. Even so, the average U.S. retail gasoline 
price has experienced frequent ups and downs, or volatility, and was 
significantly higher in 2004 than it was as recently as 2002. In fact, 
the average U.S. gasoline price in 2004, adjusted for inflation, was 
the highest since 1985.

Figure 4: U.S. Retail Price of Gasoline Adjusted for Inflation (1974- 
2004):

[See PDF for image] -graphic text:

Line graph with 371 items:

Month: January 1974; Dollars per gallon: $1.86.
Month: February 1974; Dollars per gallon: $1.89.
Month: March 1974; Dollars per gallon: $1.95.
Month: April 1974; Dollars per gallon: $1.94.
Month: May 1974; Dollars per gallon: $1.95.
Month: June 1974; Dollars per gallon: $1.96.
Month: July 1974; Dollars per gallon: $1.95.
Month: August 1974; Dollars per gallon: $1.93.
Month: September 1974; Dollars per gallon: $1.91.
Month: October 1974; Dollars per gallon: $1.87.
Month: November 1974; Dollars per gallon: $1.84.
Month: December 1974; Dollars per gallon: $1.83.
Month: January 1975; Dollars per gallon: $1.82.
Month: February 1975; Dollars per gallon: $1.81.
Month: March 1975; Dollars per gallon: $1.81.
Month: April 1975; Dollars per gallon: $1.81.
Month: May 1975; Dollars per gallon: $1.82.
Month: June 1975; Dollars per gallon: $1.85.
Month: July 1975; Dollars per gallon: $1.88.
Month: August 1975; Dollars per gallon: $1.88.
Month: September 1975; Dollars per gallon: $1.87.
Month: October 1975; Dollars per gallon: $1.86.
Month: November 1975; Dollars per gallon: $1.84.
Month: December 1975; Dollars per gallon: $1.82.
Month: January 1976; Dollars per gallon: $1.88.
Month: February 1976; Dollars per gallon: $1.86.
Month: March 1976; Dollars per gallon: $1.85.
Month: April 1976; Dollars per gallon: $1.84.
Month: May 1976; Dollars per gallon: $1.85.
Month: June 1976; Dollars per gallon: $1.87.
Month: July 1976; Dollars per gallon: $1.87.
Month: August 1976; Dollars per gallon: $1.88.
Month: September 1976; Dollars per gallon: $1.87.
Month: October 1976; Dollars per gallon: $1.86.
Month: November 1976; Dollars per gallon: $1.85.
Month: December 1976; Dollars per gallon: $1.82.
Month: January 1977; Dollars per gallon: $1.81.
Month: February 1977; Dollars per gallon: $1.81.
Month: March 1977; Dollars per gallon: $1.81.
Month: April 1977; Dollars per gallon: $1.82.
Month: May 1977; Dollars per gallon: $1.83.
Month: June 1977; Dollars per gallon: $1.83.
Month: July 1977; Dollars per gallon: $1.82.
Month: August 1977; Dollars per gallon: $1.82.
Month: September 1977; Dollars per gallon: $1.81.
Month: October 1977; Dollars per gallon: $1.80.
Month: November 1977; Dollars per gallon: $1.80.
Month: December 1977; Dollars per gallon: $1.80.
Month: January 1978; Dollars per gallon: $1.75.
Month: February 1978; Dollars per gallon: $1.74.
Month: March 1978; Dollars per gallon: $1.73.
Month: April 1978; Dollars per gallon: $1.72.
Month: May 1978; Dollars per gallon: $1.72.
Month: June 1978; Dollars per gallon: $1.72.
Month: July 1978; Dollars per gallon: $1.74.
Month: August 1978; Dollars per gallon: $1.75.
Month: September 1978; Dollars per gallon: $1.75.
Month: October 1978; Dollars per gallon: $1.74.
Month: November 1978; Dollars per gallon: $1.76.
Month: December 1978; Dollars per gallon: $1.77.
Month: January 1979; Dollars per gallon: $1.77.
Month: February 1979; Dollars per gallon: $1.78.
Month: March 1979; Dollars per gallon: $1.79.
Month: April 1979; Dollars per gallon: $1.84.
Month: May 1979; Dollars per gallon: $1.86.
Month: June 1979; Dollars per gallon: $1.87.
Month: July 1979; Dollars per gallon: $1.89.
Month: August 1979; Dollars per gallon: $1.91.
Month: September 1979; Dollars per gallon: $1.92.
Month: October 1979; Dollars per gallon: $1.91.
Month: November 1979; Dollars per gallon: $1.94.
Month: December 1979; Dollars per gallon: $1.94.
Month: January 1980; Dollars per gallon: $1.98.
Month: February 1980; Dollars per gallon: $2.01.
Month: March 1980; Dollars per gallon: $2.02.
Month: April 1980; Dollars per gallon: $2.02.
Month: May 1980; Dollars per gallon: $2.00.
Month: June 1980; Dollars per gallon: $1.98.
Month: July 1980; Dollars per gallon: $1.96.
Month: August 1980; Dollars per gallon: $1.96.
Month: September 1980; Dollars per gallon: $1.95.
Month: October 1980; Dollars per gallon: $1.95.
Month: November 1980; Dollars per gallon: $1.96.
Month: December 1980; Dollars per gallon: $1.94.
Month: January 1981; Dollars per gallon: $1.95.
Month: February 1981; Dollars per gallon: $1.97.
Month: March 1981; Dollars per gallon: $1.98.
Month: April 1981; Dollars per gallon: $1.97.
Month: May 1981; Dollars per gallon: $1.95.
Month: June 1981; Dollars per gallon: $1.92.
Month: July 1981; Dollars per gallon: $1.90.
Month: August 1981; Dollars per gallon: $1.89.
Month: September 1981; Dollars per gallon: $1.89.
Month: October 1981; Dollars per gallon: $1.89.
Month: November 1981; Dollars per gallon: $1.89.
Month: December 1981; Dollars per gallon: $1.89.
Month: January 1982; Dollars per gallon: $1.87.
Month: February 1982; Dollars per gallon: $1.85.
Month: March 1982; Dollars per gallon: $1.81.
Month: April 1982; Dollars per gallon: $1.77.
Month: May 1982; Dollars per gallon: $1.76.
Month: June 1982; Dollars per gallon: $1.79.
Month: July 1982; Dollars per gallon: $1.80.
Month: August 1982; Dollars per gallon: $1.78.
Month: September 1982; Dollars per gallon: $1.76.
Month: October 1982; Dollars per gallon: $1.74.
Month: November 1982; Dollars per gallon: $1.74.
Month: December 1982; Dollars per gallon: $1.72.
Month: January 1983; Dollars per gallon: $1.70.
Month: February 1983; Dollars per gallon: $1.67.
Month: March 1983; Dollars per gallon: $1.65.
Month: April 1983; Dollars per gallon: $1.70.
Month: May 1983; Dollars per gallon: $1.71.
Month: June 1983; Dollars per gallon: $1.71.
Month: July 1983; Dollars per gallon: $1.72.
Month: August 1983; Dollars per gallon: $1.71.
Month: September 1983; Dollars per gallon: $1.70.
Month: October 1983; Dollars per gallon: $1.69.
Month: November 1983; Dollars per gallon: $1.69.
Month: December 1983; Dollars per gallon: $1.69.
Month: January 1984; Dollars per gallon: $1.67.
Month: February 1984; Dollars per gallon: $1.65.
Month: March 1984; Dollars per gallon: $1.66.
Month: April 1984; Dollars per gallon: $1.67.
Month: May 1984; Dollars per gallon: $1.66.
Month: June 1984; Dollars per gallon: $1.64.
Month: July 1984; Dollars per gallon: $1.62.
Month: August 1984; Dollars per gallon: $1.60.
Month: September 1984; Dollars per gallon: $1.61.
Month: October 1984; Dollars per gallon: $1.62.
Month: November 1984; Dollars per gallon: $1.64.
Month: December 1984; Dollars per gallon: $1.63.
Month: January 1985; Dollars per gallon: $1.59.
Month: February 1985; Dollars per gallon: $1.58.
Month: March 1985; Dollars per gallon: $1.59.
Month: April 1985; Dollars per gallon: $1.63.
Month: May 1985; Dollars per gallon: $1.63.
Month: June 1985; Dollars per gallon: $1.63.
Month: July 1985; Dollars per gallon: $1.63.
Month: August 1985; Dollars per gallon: $1.62.
Month: September 1985; Dollars per gallon: $1.61.
Month: October 1985; Dollars per gallon: $1.61.
Month: November 1985; Dollars per gallon: $1.63.
Month: December 1985; Dollars per gallon: $1.62.
Month: January 1986; Dollars per gallon: $1.61.
Month: February 1986; Dollars per gallon: $1.57.
Month: March 1986; Dollars per gallon: $1.47.
Month: April 1986; Dollars per gallon: $1.41.
Month: May 1986; Dollars per gallon: $1.44.
Month: June 1986; Dollars per gallon: $1.44.
Month: July 1986; Dollars per gallon: $1.39.
Month: August 1986; Dollars per gallon: $1.35.
Month: September 1986; Dollars per gallon: $1.37.
Month: October 1986; Dollars per gallon: $1.36.
Month: November 1986; Dollars per gallon: $1.38.
Month: December 1986; Dollars per gallon: $1.38.
Month: January 1987; Dollars per gallon: $1.40.
Month: February 1987; Dollars per gallon: $1.44.
Month: March 1987; Dollars per gallon: $1.45.
Month: April 1987; Dollars per gallon: $1.48.
Month: May 1987; Dollars per gallon: $1.47.
Month: June 1987; Dollars per gallon: $1.44.
Month: July 1987; Dollars per gallon: $1.45.
Month: August 1987; Dollars per gallon: $1.47.
Month: September 1987; Dollars per gallon: $1.46.
Month: October 1987; Dollars per gallon: $1.48.
Month: November 1987; Dollars per gallon: $1.50.
Month: December 1987; Dollars per gallon: $1.49.
Month: January 1988; Dollars per gallon: $1.46.
Month: February 1988; Dollars per gallon: $1.43.
Month: March 1988; Dollars per gallon: $1.43.
Month: April 1988; Dollars per gallon: $1.45.
Month: May 1988; Dollars per gallon: $1.47.
Month: June 1988; Dollars per gallon: $1.43.
Month: July 1988; Dollars per gallon: $1.44.
Month: August 1988; Dollars per gallon: $1.46.
Month: September 1988; Dollars per gallon: $1.45.
Month: October 1988; Dollars per gallon: $1.45.
Month: November 1988; Dollars per gallon: $1.46.
Month: December 1988; Dollars per gallon: $1.43.
Month: January 1989; Dollars per gallon: $1.41.
Month: February 1989; Dollars per gallon: $1.42.
Month: March 1989; Dollars per gallon: $1.43.
Month: April 1989; Dollars per gallon: $1.53.
Month: May 1989; Dollars per gallon: $1.57.
Month: June 1989; Dollars per gallon: $1.54.
Month: July 1989; Dollars per gallon: $1.51.
Month: August 1989; Dollars per gallon: $1.49.
Month: September 1989; Dollars per gallon: $1.46.
Month: October 1989; Dollars per gallon: $1.48.
Month: November 1989; Dollars per gallon: $1.46.
Month: December 1989; Dollars per gallon: $1.44.
Month: January 1990; Dollars per gallon: $1.46.
Month: February 1990; Dollars per gallon: $1.47.
Month: March 1990; Dollars per gallon: $1.46.
Month: April 1990; Dollars per gallon: $1.49.
Month: May 1990; Dollars per gallon: $1.50.
Month: June 1990; Dollars per gallon: $1.49.
Month: July 1990; Dollars per gallon: $1.50.
Month: August 1990; Dollars per gallon: $1.57.
Month: September 1990; Dollars per gallon: $1.62.
Month: October 1990; Dollars per gallon: $1.69.
Month: November 1990; Dollars per gallon: $1.69.
Month: December 1990; Dollars per gallon: $1.68.
Month: January 1991; Dollars per gallon: $1.59.
Month: February 1991; Dollars per gallon: $1.52.
Month: March 1991; Dollars per gallon: $1.48.
Month: April 1991; Dollars per gallon: $1.51.
Month: May 1991; Dollars per gallon: $1.55.
Month: June 1991; Dollars per gallon: $1.53.
Month: July 1991; Dollars per gallon: $1.50.
Month: August 1991; Dollars per gallon: $1.51.
Month: September 1991; Dollars per gallon: $1.51.
Month: October 1991; Dollars per gallon: $1.50.
Month: November 1991; Dollars per gallon: $1.52.
Month: December 1991; Dollars per gallon: $1.50.
Month: January 1992; Dollars per gallon: $1.46.
Month: February 1992; Dollars per gallon: $1.45.
Month: March 1992; Dollars per gallon: $1.46.
Month: April 1992; Dollars per gallon: $1.48.
Month: May 1992; Dollars per gallon: $1.51.
Month: June 1992; Dollars per gallon: $1.52.
Month: July 1992; Dollars per gallon: $1.51.
Month: August 1992; Dollars per gallon: $1.50.
Month: September 1992; Dollars per gallon: $1.49.
Month: October 1992; Dollars per gallon: $1.51.
Month: November 1992; Dollars per gallon: $1.51.
Month: December 1992; Dollars per gallon: $1.49.
Month: January 1993; Dollars per gallon: $1.47.
Month: February 1993; Dollars per gallon: $1.48.
Month: March 1993; Dollars per gallon: $1.46.
Month: April 1993; Dollars per gallon: $1.47.
Month: May 1993; Dollars per gallon: $1.48.
Month: June 1993; Dollars per gallon: $1.45.
Month: July 1993; Dollars per gallon: $1.43.
Month: August 1993; Dollars per gallon: $1.42.
Month: September 1993; Dollars per gallon: $1.41.
Month: October 1993; Dollars per gallon: $1.46.
Month: November 1993; Dollars per gallon: $1.46.
Month: December 1993; Dollars per gallon: $1.43.
Month: January 1994; Dollars per gallon: $1.41.
Month: February 1994; Dollars per gallon: $1.41.
Month: March 1994; Dollars per gallon: $1.40.
Month: April 1994; Dollars per gallon: $1.42.
Month: May 1994; Dollars per gallon: $1.43.
Month: June 1994; Dollars per gallon: $1.43.
Month: July 1994; Dollars per gallon: $1.45.
Month: August 1994; Dollars per gallon: $1.49.
Month: September 1994; Dollars per gallon: $1.48.
Month: October 1994; Dollars per gallon: $1.49.
Month: November 1994; Dollars per gallon: $1.50.
Month: December 1994; Dollars per gallon: $1.49.
Month: January 1995; Dollars per gallon: $1.48.
Month: February 1995; Dollars per gallon: $1.47.
Month: March 1995; Dollars per gallon: $1.47.
Month: April 1995; Dollars per gallon: $1.50.
Month: May 1995; Dollars per gallon: $1.54.
Month: June 1995; Dollars per gallon: $1.53.
Month: July 1995; Dollars per gallon: $1.51.
Month: August 1995; Dollars per gallon: $1.48.
Month: September 1995; Dollars per gallon: $1.48.
Month: October 1995; Dollars per gallon: $1.47.
Month: November 1995; Dollars per gallon: $1.46.
Month: December 1995; Dollars per gallon: $1.45.
Month: January 1996; Dollars per gallon: $1.47.
Month: February 1996; Dollars per gallon: $1.46.
Month: March 1996; Dollars per gallon: $1.49.
Month: April 1996; Dollars per gallon: $1.55.
Month: May 1996; Dollars per gallon: $1.60.
Month: June 1996; Dollars per gallon: $1.57.
Month: July 1996; Dollars per gallon: $1.54.
Month: August 1996; Dollars per gallon: $1.52.
Month: September 1996; Dollars per gallon: $1.51.
Month: October 1996; Dollars per gallon: $1.52.
Month: November 1996; Dollars per gallon: $1.54.
Month: December 1996; Dollars per gallon: $1.53.
Month: January 1997; Dollars per gallon: $1.52.
Month: February 1997; Dollars per gallon: $1.51.
Month: March 1997; Dollars per gallon: $1.52.
Month: April 1997; Dollars per gallon: $1.53.
Month: May 1997; Dollars per gallon: $1.52.
Month: June 1997; Dollars per gallon: $1.49.
Month: July 1997; Dollars per gallon: $1.48.
Month: August 1997; Dollars per gallon: $1.52.
Month: September 1997; Dollars per gallon: $1.53.
Month: October 1997; Dollars per gallon: $1.52.
Month: November 1997; Dollars per gallon: $1.50.
Month: December 1997; Dollars per gallon: $1.48.
Month: January 1998; Dollars per gallon: $1.46.
Month: February 1998; Dollars per gallon: $1.43.
Month: March 1998; Dollars per gallon: $1.40.
Month: April 1998; Dollars per gallon: $1.41.
Month: May 1998; Dollars per gallon: $1.44.
Month: June 1998; Dollars per gallon: $1.41.
Month: July 1998; Dollars per gallon: $1.40.
Month: August 1998; Dollars per gallon: $1.38.
Month: September 1998; Dollars per gallon: $1.37.
Month: October 1998; Dollars per gallon: $1.40.
Month: November 1998; Dollars per gallon: $1.40.
Month: December 1998; Dollars per gallon: $1.36.
Month: January 1999; Dollars per gallon: $1.35.
Month: February 1999; Dollars per gallon: $1.34.
Month: March 1999; Dollars per gallon: $1.37.
Month: April 1999; Dollars per gallon: $1.53.
Month: May 1999; Dollars per gallon: $1.52.
Month: June 1999; Dollars per gallon: $1.47.
Month: July 1999; Dollars per gallon: $1.49.
Month: August 1999; Dollars per gallon: $1.54.
Month: September 1999; Dollars per gallon: $1.54.
Month: October 1999; Dollars per gallon: $1.56.
Month: November 1999; Dollars per gallon: $1.55.
Month: December 1999; Dollars per gallon: $1.58.
Month: January 2000; Dollars per gallon: $1.58.
Month: February 2000; Dollars per gallon: $1.60.
Month: March 2000; Dollars per gallon: $1.72.
Month: April 2000; Dollars per gallon: $1.70.
Month: May 2000; Dollars per gallon: $1.69.
Month: June 2000; Dollars per gallon: $1.70.
Month: July 2000; Dollars per gallon: $1.68.
Month: August 2000; Dollars per gallon: $1.64.
Month: September 2000; Dollars per gallon: $1.65.
Month: October 2000; Dollars per gallon: $1.65.
Month: November 2000; Dollars per gallon: $1.65.
Month: December 2000; Dollars per gallon: $1.59.
Month: January 2001; Dollars per gallon: $1.52.
Month: February 2001; Dollars per gallon: $1.53.
Month: March 2001; Dollars per gallon: $1.53.
Month: April 2001; Dollars per gallon: $1.60.
Month: May 2001; Dollars per gallon: $1.68.
Month: June 2001; Dollars per gallon: $1.59.
Month: July 2001; Dollars per gallon: $1.53.
Month: August 2001; Dollars per gallon: $1.51.
Month: September 2001; Dollars per gallon: $1.58.
Month: October 2001; Dollars per gallon: $1.52.
Month: November 2001; Dollars per gallon: $1.49.
Month: December 2001; Dollars per gallon: $1.39.
Month: January 2002; Dollars per gallon: $1.39.
Month: February 2002; Dollars per gallon: $1.39.
Month: March 2002; Dollars per gallon: $1.47.
Month: April 2002; Dollars per gallon: $1.57.
Month: May 2002; Dollars per gallon: $1.58.
Month: June 2002; Dollars per gallon: $1.53.
Month: July 2002; Dollars per gallon: $1.54.
Month: August 2002; Dollars per gallon: $1.54.
Month: September 2002; Dollars per gallon: $1.54.
Month: October 2002; Dollars per gallon: $1.57.
Month: November 2002; Dollars per gallon: $1.58.
Month: December 2002; Dollars per gallon: $1.54.
Month: January 2003; Dollars per gallon: $1.58.
Month: February 2003; Dollars per gallon: $1.65.
Month: March 2003; Dollars per gallon: $1.67.
Month: April 2003; Dollars per gallon: $1.64.
Month: May 2003; Dollars per gallon: $1.57.
Month: June 2003; Dollars per gallon: $1.51.
Month: July 2003; Dollars per gallon: $1.52.
Month: August 2003; Dollars per gallon: $1.58.
Month: September 2003; Dollars per gallon: $1.63.
Month: October 2003; Dollars per gallon: $1.60.
Month: November 2003; Dollars per gallon: $1.57.
Month: December 2003; Dollars per gallon: $1.55.
Month: January 2004; Dollars per gallon: $1.58.
Month: February 2004; Dollars per gallon: $1.62.
Month: March 2004; Dollars per gallon: $1.68.
Month: April 2004; Dollars per gallon: $1.71.
Month: May 2004; Dollars per gallon: $1.78.
Month: June 2004; Dollars per gallon: $1.74.
Month: July 2004; Dollars per gallon: $1.69.
Month: August 2004; Dollars per gallon: $1.67.
Month: September 2004; Dollars per gallon: $1.67.
Month: October 2004; Dollars per gallon: $1.76.
Month: November 2004; Dollars per gallon: $1.73.

Source: GAO analysis of BLS data.

Note: Price data are monthly U.S. city averages for regular gasoline. 
Prices in 1974 and 1975 are for leaded gasoline, and prices for 1976 
onward are for unleaded gasoline. Gasoline prices were adjusted to 2003 
dollars using the Bureau of Labor Statistics' Consumer Price Index for 
All Urban Consumers: All Items.

[End of figure]

No one factor can entirely explain the variations in gasoline prices. 
As will be discussed in the following sections, the dynamics of 
gasoline prices are a function of many complex factors that are 
sometimes interconnected. Before explaining each key factor and the 
underlying causes of its behavior, we first examine the key elements 
that make up the price of a gallon of gasoline.

[End of Section 1]

Section 2: Elements of Gasoline Price:

Q. What do consumers pay for in a gallon of gasoline?

A. According to EIA, four elements determine the price consumers pay 
for a gallon of gasoline at a given time: (1) the price of crude oil, 
(2) taxes, (3) refining costs and profits, and (4) distribution and 
marketing costs and profits. Figure 5 shows the average percentage of 
each of these elements in the U.S. price of a gallon of gasoline in 
2004.

Figure 5: Elements of Gasoline Price (2004 Average):

[See PDF for image] -graphic text:

Pie graph with four items.

Crude oil: 48%;
Taxes: 23%; 
Refining: 17%; 
Distribution and marketing: 12%.

Sources: GAO analysis of EIA data; GAO (photo).

[End of figure]

Crude Oil:

According to EIA's data, the price that refiners paid for crude oil in 
2004 was the largest component of the price of regular gasoline. On 
average, crude oil price accounted for slightly less than half of the 
average price of a gallon of regular gasoline. However, the proportion 
of the price of gasoline that crude oil constitutes is not constant 
over time, nor is the share of the other elements as shown in Figure 6.

Figure 6: Elements of Gasoline Price (1990-2004):

[See PDF for image] -graphic text:

Area graph with three groups with 170 items each.

Month: August 1990; 
Percentage of the cost:
Crude oil: 46%; 
Refining: 28%; 
Distribution and Marketing: 5%; 
Taxes: 20%.

Month: September 1990; 
Percentage of the cost:
Crude oil: 57%; 
Refining: 18%; 
Distribution and Marketing: 6%; 
Taxes: 19%.

Month: October 1990; 
Percentage of the cost:
Crude oil: 59%; 
Refining: 5%; 
Distribution and Marketing: 18%; 
Taxes: 18%.

Month: November 1990; 
Percentage of the cost:
Crude oil: 55%; 
Refining: 5%; 
Distribution and Marketing: 22%; 
Taxes: 19%.

Month: December 1990; 
Percentage of the cost:
Crude oil: 46%; 
Refining: 2%; 
Distribution and Marketing: 29%; 
Taxes: 22%.

Month: January 1991; 
Percentage of the cost:
Crude oil: 46%; 
Refining: 11%; 
Distribution and Marketing: 17%; 
Taxes: 27%.

Month: February 1991; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 17%; 
Distribution and Marketing: 12%; 
Taxes: 29%.

Month: March 1991; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 25%; 
Distribution and Marketing: 4%; 
Taxes: 30%.

Month: April 1991; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 22%; 
Distribution and Marketing: 7%; 
Taxes: 29%.

Month: May 1991; 
Percentage of the cost:
Crude oil: 40%; 
Refining: 20%; 
Distribution and Marketing: 12%; 
Taxes: 28%.

Month: June 1991; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 18%; 
Distribution and Marketing: 16%; 
Taxes: 28%.

Month: July 1991; 
Percentage of the cost:
Crude oil: 40%; 
Refining: 16%; 
Distribution and Marketing: 14%; 
Taxes: 29%.

Month: August 1991; 
Percentage of the cost:
Crude oil: 40%; 
Refining: 18%; 
Distribution and Marketing: 13%; 
Taxes: 28%.

Month: September 1991; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 15%; 
Distribution and Marketing: 16%; 
Taxes: 29%.

Month: October 1991; 
Percentage of the cost:
Crude oil: 44%; 
Refining: 14%; 
Distribution and Marketing: 13%; 
Taxes: 29%.

Month: November 1991; 
Percentage of the cost:
Crude oil: 43%; 
Refining: 14%; 
Distribution and Marketing: 14%; 
Taxes: 29%.

Month: December 1991; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 10%; 
Distribution and Marketing: 22%; 
Taxes: 29%.

Month: January 1992; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 12%; 
Distribution and Marketing: 18%; 
Taxes: 31%.

Month: February 1992; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 16%; 
Distribution and Marketing: 13%; 
Taxes: 32%.

Month: March 1992; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 17%; 
Distribution and Marketing: 12%; 
Taxes: 32%.

Month: April 1992; 
Percentage of the cost:
Crude oil: 40%; 
Refining: 19%; 
Distribution and Marketing: 11%; 
Taxes: 31%.

Month: May 1992; 
Percentage of the cost:
Crude oil: 40%; 
Refining: 18%; 
Distribution and Marketing: 12%; 
Taxes: 29%.

Month: June 1992; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 16%; 
Distribution and Marketing: 15%; 
Taxes: 28%.

Month: July 1992; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 11%; 
Distribution and Marketing: 19%; 
Taxes: 28%.

Month: August 1992; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 13%; 
Distribution and Marketing: 17%; 
Taxes: 29%.

Month: September 1992; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 13%; 
Distribution and Marketing: 16%; 
Taxes: 29%.

Month: October 1992; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 13%; 
Distribution and Marketing: 16%; 
Taxes: 29%.

Month: November 1992; 
Percentage of the cost:
Crude oil: 40%; 
Refining: 10%; 
Distribution and Marketing: 22%; 
Taxes: 29%.

Month: December 1992; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 10%; 
Distribution and Marketing: 22%; 
Taxes: 30%.

Month: January 1993; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 12%; 
Distribution and Marketing: 19%; 
Taxes: 31%.

Month: February 1993; 
Percentage of the cost:
Crude oil: 40%; 
Refining: 11%; 
Distribution and Marketing: 18%; 
Taxes: 31%.

Month: March 1993; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 14%; 
Distribution and Marketing: 15%; 
Taxes: 31%.

Month: April 1993; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 16%; 
Distribution and Marketing: 13%; 
Taxes: 30%.

Month: May 1993; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 17%; 
Distribution and Marketing: 15%; 
Taxes: 30%.

Month: June 1993; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 14%; 
Distribution and Marketing: 19%; 
Taxes: 30%.

Month: July 1993; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 13%; 
Distribution and Marketing: 21%; 
Taxes: 30%.

Month: August 1993; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 16%; 
Distribution and Marketing: 18%; 
Taxes: 31%.

Month: September 1993; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 14%; 
Distribution and Marketing: 20%; 
Taxes: 31%.

Month: October 1993; 
Percentage of the cost:
Crude oil: 34%; 
Refining: 12%; 
Distribution and Marketing: 20%; 
Taxes: 34%.

Month: November 1993; 
Percentage of the cost:
Crude oil: 32%; 
Refining: 9%; 
Distribution and Marketing: 24%; 
Taxes: 34%.

Month: December 1993; 
Percentage of the cost:
Crude oil: 29%; 
Refining: 8%; 
Distribution and Marketing: 26%; 
Taxes: 36%.

Month: January 1994; 
Percentage of the cost:
Crude oil: 31%; 
Refining: 13%; 
Distribution and Marketing: 20%; 
Taxes: 37%.

Month: February 1994; 
Percentage of the cost:
Crude oil: 31%; 
Refining: 14%; 
Distribution and Marketing: 19%; 
Taxes: 37%.

Month: March 1994; 
Percentage of the cost:
Crude oil: 31%; 
Refining: 15%; 
Distribution and Marketing: 18%; 
Taxes: 37%.

Month: April 1994; 
Percentage of the cost:
Crude oil: 34%; 
Refining: 15%; 
Distribution and Marketing: 15%; 
Taxes: 36%.

Month: May 1994; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 13%; 
Distribution and Marketing: 16%; 
Taxes: 35%.

Month: June 1994; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 13%; 
Distribution and Marketing: 15%; 
Taxes: 34%.

Month: July 1994; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 14%; 
Distribution and Marketing: 15%; 
Taxes: 33%.

Month: August 1994; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 15%; 
Distribution and Marketing: 18%; 
Taxes: 32%.

Month: September 1994; 
Percentage of the cost:
Crude oil: 34%; 
Refining: 8%; 
Distribution and Marketing: 26%; 
Taxes: 32%.

Month: October 1994; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 11%; 
Distribution and Marketing: 21%; 
Taxes: 33%.

Month: November 1994; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 10%; 
Distribution and Marketing: 22%; 
Taxes: 33%.

Month: December 1994; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 7%; 
Distribution and Marketing: 24%; 
Taxes: 34%.

Month: January 1995; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 11%; 
Distribution and Marketing: 19%; 
Taxes: 34%.

Month: February 1995; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 9%; 
Distribution and Marketing: 18%; 
Taxes: 34%.

Month: March 1995; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 10%; 
Distribution and Marketing: 17%; 
Taxes: 34%.

Month: April 1995; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 15%; 
Distribution and Marketing: 12%; 
Taxes: 33%.

Month: May 1995; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 17%; 
Distribution and Marketing: 14%; 
Taxes: 31%.

Month: June 1995; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 14%; 
Distribution and Marketing: 20%; 
Taxes: 31%.

Month: July 1995; 
Percentage of the cost:
Crude oil: 34%; 
Refining: 11%; 
Distribution and Marketing: 23%; 
Taxes: 32%.

Month: August 1995; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 12%; 
Distribution and Marketing: 20%; 
Taxes: 33%.

Month: September 1995; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 13%; 
Distribution and Marketing: 18%; 
Taxes: 33%.

Month: October 1995; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 9%; 
Distribution and Marketing: 21%; 
Taxes: 34%.

Month: November 1995; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 10%; 
Distribution and Marketing: 18%; 
Taxes: 35%.

Month: December 1995; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 10%; 
Distribution and Marketing: 17%; 
Taxes: 34%.

Month: January 1996; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 9%; 
Distribution and Marketing: 18%; 
Taxes: 34%.

Month: February 1996; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 11%; 
Distribution and Marketing: 15%; 
Taxes: 34%.

Month: March 1996; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 13%; 
Distribution and Marketing: 13%; 
Taxes: 33%.

Month: April 1996; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 16%; 
Distribution and Marketing: 12%; 
Taxes: 30%.

Month: May 1996; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 14%; 
Distribution and Marketing: 19%; 
Taxes: 29%.

Month: June 1996; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 13%; 
Distribution and Marketing: 21%; 
Taxes: 29%.

Month: July 1996; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 13%; 
Distribution and Marketing: 19%; 
Taxes: 30%.

Month: August 1996; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 10%; 
Distribution and Marketing: 18%; 
Taxes: 31%.

Month: September 1996; 
Percentage of the cost:
Crude oil: 43%; 
Refining: 9%; 
Distribution and Marketing: 17%; 
Taxes: 31%.

Month: October 1996; 
Percentage of the cost:
Crude oil: 46%; 
Refining: 9%; 
Distribution and Marketing: 15%; 
Taxes: 31%.

Month: November 1996; 
Percentage of the cost:
Crude oil: 44%; 
Refining: 10%; 
Distribution and Marketing: 16%; 
Taxes: 30%.

Month: December 1996; 
Percentage of the cost:
Crude oil: 45%; 
Refining: 9%; 
Distribution and Marketing: 16%; 
Taxes: 30%.

Month: January 1997; 
Percentage of the cost:
Crude oil: 45%; 
Refining: 10%; 
Distribution and Marketing: 14%; 
Taxes: 30%.

Month: February 1997; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 10%; 
Distribution and Marketing: 17%; 
Taxes: 30%.

Month: March 1997; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 14%; 
Distribution and Marketing: 16%; 
Taxes: 31%.

Month: April 1997; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 15%; 
Distribution and Marketing: 17%; 
Taxes: 31%.

Month: May 1997; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 15%; 
Distribution and Marketing: 16%; 
Taxes: 31%.

Month: June 1997; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 12%; 
Distribution and Marketing: 21%; 
Taxes: 31%.

Month: July 1997; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 15%; 
Distribution and Marketing: 16%; 
Taxes: 32%.

Month: August 1997; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 21%; 
Distribution and Marketing: 13%; 
Taxes: 31%.

Month: September 1997; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 15%; 
Distribution and Marketing: 19%; 
Taxes: 30%.

Month: October 1997; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 11%; 
Distribution and Marketing: 20%; 
Taxes: 31%.

Month: November 1997; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 10%; 
Distribution and Marketing: 21%; 
Taxes: 32%.

Month: December 1997; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 10%; 
Distribution and Marketing: 21%; 
Taxes: 33%.

Month: January 1998; 
Percentage of the cost:
Crude oil: 33%; 
Refining: 11%; 
Distribution and Marketing: 21%; 
Taxes: 35%.

Month: February 1998; 
Percentage of the cost:
Crude oil: 32%; 
Refining: 13%; 
Distribution and Marketing: 19%; 
Taxes: 37%.

Month: March 1998; 
Percentage of the cost:
Crude oil: 30%; 
Refining: 14%; 
Distribution and Marketing: 18%; 
Taxes: 38%.

Month: April 1998; 
Percentage of the cost:
Crude oil: 30%; 
Refining: 18%; 
Distribution and Marketing: 14%; 
Taxes: 37%.

Month: May 1998; 
Percentage of the cost:
Crude oil: 29%; 
Refining: 19%; 
Distribution and Marketing: 16%; 
Taxes: 36%.

Month: June 1998; 
Percentage of the cost:
Crude oil: 27%; 
Refining: 17%; 
Distribution and Marketing: 20%; 
Taxes: 36%.

Month: July 1998; 
Percentage of the cost:
Crude oil: 27%; 
Refining: 16%; 
Distribution and Marketing: 21%; 
Taxes: 36%.

Month: August 1998; 
Percentage of the cost:
Crude oil: 27%; 
Refining: 13%; 
Distribution and Marketing: 23%; 
Taxes: 37%.

Month: September 1998; 
Percentage of the cost:
Crude oil: 31%; 
Refining: 12%; 
Distribution and Marketing: 19%; 
Taxes: 38%.

Month: October 1998; 
Percentage of the cost:
Crude oil: 29%; 
Refining: 13%; 
Distribution and Marketing: 20%; 
Taxes: 38%.

Month: November 1998; 
Percentage of the cost:
Crude oil: 28%; 
Refining: 10%; 
Distribution and Marketing: 24%; 
Taxes: 39%.

Month: December 1998; 
Percentage of the cost:
Crude oil: 25%; 
Refining: 9%; 
Distribution and Marketing: 25%; 
Taxes: 41%.

Month: January 1999; 
Percentage of the cost:
Crude oil: 26%; 
Refining: 11%; 
Distribution and Marketing: 23%; 
Taxes: 40%.

Month: February 1999; 
Percentage of the cost:
Crude oil: 27%; 
Refining: 9%; 
Distribution and Marketing: 23%; 
Taxes: 41%.

Month: March 1999; 
Percentage of the cost:
Crude oil: 29%; 
Refining: 19%; 
Distribution and Marketing: 14%; 
Taxes: 38%.

Month: April 1999; 
Percentage of the cost:
Crude oil: 31%; 
Refining: 16%; 
Distribution and Marketing: 19%; 
Taxes: 33%.

Month: May 1999; 
Percentage of the cost:
Crude oil: 34%; 
Refining: 12%; 
Distribution and Marketing: 21%; 
Taxes: 33%.

Month: June 1999; 
Percentage of the cost:
Crude oil: 34%; 
Refining: 15%; 
Distribution and Marketing: 17%; 
Taxes: 34%.

Month: July 1999; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 18%; 
Distribution and Marketing: 12%; 
Taxes: 33%.

Month: August 1999; 
Percentage of the cost:
Crude oil: 38%; 
Refining: 15%; 
Distribution and Marketing: 15%; 
Taxes: 31%.

Month: September 1999; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 12%; 
Distribution and Marketing: 17%; 
Taxes: 30%.

Month: October 1999; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 8%; 
Distribution and Marketing: 20%; 
Taxes: 30%.

Month: November 1999; 
Percentage of the cost:
Crude oil: 44%; 
Refining: 10%; 
Distribution and Marketing: 15%; 
Taxes: 30%.

Month: December 1999; 
Percentage of the cost:
Crude oil: 46%; 
Refining: 7%; 
Distribution and Marketing: 17%; 
Taxes: 30%.

Month: January 2000; 
Percentage of the cost:
Crude oil: 47%; 
Refining: 9%; 
Distribution and Marketing: 14%; 
Taxes: 30%.

Month: February 2000; 
Percentage of the cost:
Crude oil: 48%; 
Refining: 14%; 
Distribution and Marketing: 11%; 
Taxes: 28%.

Month: March 2000; 
Percentage of the cost:
Crude oil: 45%; 
Refining: 15%; 
Distribution and Marketing: 15%; 
Taxes: 25%.

Month: April 2000; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 11%; 
Distribution and Marketing: 22%; 
Taxes: 26%.

Month: May 2000; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 20%; 
Distribution and Marketing: 12%; 
Taxes: 26%.

Month: June 2000; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 22%; 
Distribution and Marketing: 12%; 
Taxes: 24%.

Month: July 2000; 
Percentage of the cost:
Crude oil: 44%; 
Refining: 13%; 
Distribution and Marketing: 18%; 
Taxes: 25%.

Month: August 2000; 
Percentage of the cost:
Crude oil: 47%; 
Refining: 15%; 
Distribution and Marketing: 11%; 
Taxes: 26%.

Month: September 2000; 
Percentage of the cost:
Crude oil: 48%; 
Refining: 16%; 
Distribution and Marketing: 11%; 
Taxes: 25%.

Month: October 2000; 
Percentage of the cost:
Crude oil: 48%; 
Refining: 15%; 
Distribution and Marketing: 13%; 
Taxes: 25%.

Month: November 2000; 
Percentage of the cost:
Crude oil: 49%; 
Refining: 12%; 
Distribution and Marketing: 14%; 
Taxes: 25%.

Month: December 2000; 
Percentage of the cost:
Crude oil: 43%; 
Refining: 9%; 
Distribution and Marketing: 20%; 
Taxes: 27%.

Month: January 2001; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 19%; 
Distribution and Marketing: 14%; 
Taxes: 26%.

Month: February 2001; 
Percentage of the cost:
Crude oil: 43%; 
Refining: 17%; 
Distribution and Marketing: 14%; 
Taxes: 26%.

Month: March 2001; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 20%; 
Distribution and Marketing: 13%; 
Taxes: 27%.

Month: April 2001; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 32%; 
Distribution and Marketing: 8%; 
Taxes: 24%.

Month: May 2001; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 26%; 
Distribution and Marketing: 17%; 
Taxes: 22%.

Month: June 2001; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 13%; 
Distribution and Marketing: 27%; 
Taxes: 23%.

Month: July 2001; 
Percentage of the cost:
Crude oil: 40%; 
Refining: 10%; 
Distribution and Marketing: 24%; 
Taxes: 26%.

Month: August 2001; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 20%; 
Distribution and Marketing: 13%; 
Taxes: 26%.

Month: September 2001; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 18%; 
Distribution and Marketing: 20%; 
Taxes: 25%.

Month: October 2001; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 11%; 
Distribution and Marketing: 24%; 
Taxes: 28%.

Month: November 2001; 
Percentage of the cost:
Crude oil: 35%; 
Refining: 11%; 
Distribution and Marketing: 22%; 
Taxes: 32%.

Month: December 2001; 
Percentage of the cost:
Crude oil: 36%; 
Refining: 12%; 
Distribution and Marketing: 17%; 
Taxes: 35%.

Month: January 2002; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 13%; 
Distribution and Marketing: 16%; 
Taxes: 34%.

Month: February 2002; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 12%; 
Distribution and Marketing: 15%; 
Taxes: 34%.

Month: March 2002; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 18%; 
Distribution and Marketing: 10%; 
Taxes: 30%.

Month: April 2002; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 16%; 
Distribution and Marketing: 16%; 
Taxes: 27%.

Month: May 2002; 
Percentage of the cost:
Crude oil: 43%; 
Refining: 13%; 
Distribution and Marketing: 17%; 
Taxes: 27%.

Month: June 2002; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 15%; 
Distribution and Marketing: 16%; 
Taxes: 27%.

Month: July 2002; 
Percentage of the cost:
Crude oil: 43%; 
Refining: 14%; 
Distribution and Marketing: 16%; 
Taxes: 27%.

Month: August 2002; 
Percentage of the cost:
Crude oil: 45%; 
Refining: 12%; 
Distribution and Marketing: 17%; 
Taxes: 27%.

Month: September 2002; 
Percentage of the cost:
Crude oil: 47%; 
Refining: 10%; 
Distribution and Marketing: 16%; 
Taxes: 27%.

Month: October 2002; 
Percentage of the cost:
Crude oil: 44%; 
Refining: 15%; 
Distribution and Marketing: 15%; 
Taxes: 26%.

Month: November 2002; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 11%; 
Distribution and Marketing: 21%; 
Taxes: 26%.

Month: December 2002; 
Percentage of the cost:
Crude oil: 46%; 
Refining: 11%; 
Distribution and Marketing: 15%; 
Taxes: 27%.

Month: January 2003; 
Percentage of the cost:
Crude oil: 50%; 
Refining: 11%; 
Distribution and Marketing: 13%; 
Taxes: 26%.

Month: February 2003; 
Percentage of the cost:
Crude oil: 49%; 
Refining: 16%; 
Distribution and Marketing: 12%; 
Taxes: 23%.

Month: March 2003; 
Percentage of the cost:
Crude oil: 43%; 
Refining: 17%; 
Distribution and Marketing: 18%; 
Taxes: 22%.

Month: April 2003; 
Percentage of the cost:
Crude oil: 39%; 
Refining: 15%; 
Distribution and Marketing: 23%; 
Taxes: 24%.

Month: May 2003; 
Percentage of the cost:
Crude oil: 41%; 
Refining: 15%; 
Distribution and Marketing: 19%; 
Taxes: 25%.

Month: June 2003; 
Percentage of the cost:
Crude oil: 45%; 
Refining: 15%; 
Distribution and Marketing: 15%; 
Taxes: 25%.

Month: July 2003; 
Percentage of the cost:
Crude oil: 45%; 
Refining: 15%; 
Distribution and Marketing: 15%; 
Taxes: 25%.

Month: August 2003; 
Percentage of the cost:
Crude oil: 43%; 
Refining: 23%; 
Distribution and Marketing: 11%; 
Taxes: 23%.

Month: September 2003; 
Percentage of the cost:
Crude oil: 37%; 
Refining: 15%; 
Distribution and Marketing: 25%; 
Taxes: 22%.

Month: October 2003; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 15%; 
Distribution and Marketing: 19%; 
Taxes: 24%.

Month: November 2003; 
Percentage of the cost:
Crude oil: 45%; 
Refining: 12%; 
Distribution and Marketing: 18%; 
Taxes: 25%.

Month: December 2003; 
Percentage of the cost:
Crude oil: 47%; 
Refining: 12%; 
Distribution and Marketing: 16%; 
Taxes: 25%.

Month: January 2004; 
Percentage of the cost:
Crude oil: 47%; 
Refining: 17%; 
Distribution and Marketing: 13%; 
Taxes: 24%.

Month: February 2004; 
Percentage of the cost:
Crude oil: 46%; 
Refining: 19%; 
Distribution and Marketing: 12%; 
Taxes: 23%.

Month: March 2004; 
Percentage of the cost:
Crude oil: 45%; 
Refining: 19%; 
Distribution and Marketing: 14%; 
Taxes: 22%.

Month: April 2004; 
Percentage of the cost:
Crude oil: 44%; 
Refining: 22%; 
Distribution and Marketing: 12%; 
Taxes: 21%.

Month: May 2004; 
Percentage of the cost:
Crude oil: 44%; 
Refining: 27%; 
Distribution and Marketing: 10%; 
Taxes: 19%.

Month: June 2004; 
Percentage of the cost:
Crude oil: 42%; 
Refining: 20%; 
Distribution and Marketing: 19%; 
Taxes: 19%.

Month: July 2004; 
Percentage of the cost:
Crude oil: 46%; 
Refining: 21%; 
Distribution and Marketing: 14%; 
Taxes: 20%.

Month: August 2004; 
Percentage of the cost:
Crude oil: 51%; 
Refining: 14%; 
Distribution and Marketing: 15%; 
Taxes: 20%.

Month: September 2004; 
Percentage of the cost:
Crude oil: 53%; 
Refining: 16%; 
Distribution and Marketing: 12%; 
Taxes: 20%.

Source: GAO analysis of EIA data.

[End of figure]

Taxes:

On average, taxes accounted for 23 percent of what consumers paid for a 
gallon of gasoline in 2004, according to EIA's data. This percentage 
includes estimated federal and average state taxes totaling 44 cents 
per gallon (see Fig. 7).[Footnote 5] Federal taxes accounted for 18.4 
cents of this total, while state taxes averaged 25.6 cents per gallon, 
although taxes vary among states. A chart showing total gasoline taxes 
for each of the 50 states and the District of Columbia is presented in 
section 4 of this primer.

Figure 7: Estimated Federal and Average State Gasoline Taxes Per Gallon 
(2004):

[See PDF for image] -graphic text:

Pie graph with 2 items.

Average state tax: 25.6 cents per gallon; 
Federal tax: 18.4 cents per gallon; 
Total: 44 cents per gallon.

Sources: GAO analysis of API data; GAO (photo).

[End of figure]

Refining:

On average, refining costs and profits made up about 17 percent of the 
pump price for regular gasoline in 2004, based on EIA data. This 
element of the pump price includes the labor, materials, energy, and 
other costs of refining crude oil through a number of physical and 
chemical transformations to create the products in Figure 1. It also 
includes the profits to refinery owners.

Distribution and Marketing:

According to EIA data, the costs and profits associated with 
distribution and marketing of gasoline constituted about 12 percent of 
the average price of a gallon of regular gasoline in 2004. This price 
element includes the costs of distributing and marketing gasoline from 
refiners to wholesale marketers and/or retail marketers and the profits 
made by the wholesale and retail marketers.

While we have provided a snapshot of the key components of the retail 
price of gasoline at any given point in time, the snapshot approach 
does not explain why the price that consumers pay changes over time and 
varies across geographic areas, nor does it explain the influences 
behind this behavior. Sections 3 and 4 provide more insight into the 
dynamic behavior of retail gasoline prices by examining the factors 
that cause these changes in their broader, and often global, contexts.

[End of section]

Section 3: Variations in Gasoline Prices over Time:

Q. What are the key factors causing gasoline prices to change over time?

A. A number of key factors cause the retail price of gasoline to vary 
over time. First, and most importantly, gasoline price changes are 
caused by changes in the price of crude oil. As Figure 8 shows, the 
trend in gasoline prices has generally tracked the trend in crude oil 
prices, although the two do not necessarily rise and fall in lockstep. 
Second, gasoline prices vary because of changes in how much gasoline we 
demand relative to the supply. Third, federal and state requirements 
calling for special gasoline blends to improve air quality can make it 
more costly to produce gasoline, thus increasing its price. Fourth, 
seasonal factors affect demand and supply, and hence, the price of 
gasoline. Fifth, changes in taxes levied on gasoline have affected 
gasoline prices over the past decade, but because federal and state 
gasoline taxes remained relatively constant in recent years, they have 
not significantly contributed to recent volatility in gasoline prices. 
Sixth, changes within the petroleum industry, such as mergers, can also 
cause the price of gasoline to change over time. How these key factors 
are, in turn, affected by other influences is explained in the answers 
to subsequent questions in this section.

Figure 8: Crude Oil and Gasoline Prices (1974-2004):

[See PDF for image] -graphic text:

Line graph with 2 lines with 369 items each.

Month: January 1974; 
Crude oil price (Dollars per gallon): $0.18; 
Gasoline price (Dollars per gallon): $0.47.

Month: February 1974; 
Crude oil price (Dollars per gallon): $0.20; 
Gasoline price (Dollars per gallon): $0.49.

Month: March 1974; 
Crude oil price (Dollars per gallon): $0.21; 
Gasoline price (Dollars per gallon): $0.53.

Month: April 1974; 
Crude oil price (Dollars per gallon): $0.22; 
Gasoline price (Dollars per gallon): $0.54.

Month: May 1974; 
Crude oil price (Dollars per gallon): $0.22; 
Gasoline price (Dollars per gallon): $0.55.

Month: June 1974; 
Crude oil price (Dollars per gallon): $0.23; 
Gasoline price (Dollars per gallon): $0.56.

Month: July 1974; 
Crude oil price (Dollars per gallon): $0.22; 
Gasoline price (Dollars per gallon): $0.56.

Month: August 1974; 
Crude oil price (Dollars per gallon): $0.22; 
Gasoline price (Dollars per gallon): $0.55.

Month: September 1974; 
Crude oil price (Dollars per gallon): $0.22; 
Gasoline price (Dollars per gallon): $0.55.

Month: October 1974; 
Crude oil price (Dollars per gallon): $0.22; 
Gasoline price (Dollars per gallon): $0.53.

Month: November 1974; 
Crude oil price (Dollars per gallon): $0.22; 
Gasoline price (Dollars per gallon): $0.53.

Month: December 1974; 
Crude oil price (Dollars per gallon): $0.22; 
Gasoline price (Dollars per gallon): $0.53.

Month: January 1975; 
Crude oil price (Dollars per gallon): $0.23; 
Gasoline price (Dollars per gallon): $0.53.

Month: February 1975; 
Crude oil price (Dollars per gallon): $0.24; 
Gasoline price (Dollars per gallon): $0.53.

Month: March 1975; 
Crude oil price (Dollars per gallon): $0.24; 
Gasoline price (Dollars per gallon): $0.53.

Month: April 1975; 
Crude oil price (Dollars per gallon): $0.23; 
Gasoline price (Dollars per gallon): $0.54.

Month: May 1975; 
Crude oil price (Dollars per gallon): $0.23; 
Gasoline price (Dollars per gallon): $0.55.

Month: June 1975; 
Crude oil price (Dollars per gallon): $0.25; 
Gasoline price (Dollars per gallon): $0.57.

Month: July 1975; 
Crude oil price (Dollars per gallon): $0.25; 
Gasoline price (Dollars per gallon): $0.59.

Month: August 1975; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.60.

Month: September 1975; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.60.

Month: October 1975; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.59.

Month: November 1975; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.59.

Month: December 1975; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.59.

Month: January 1976; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.61.

Month: February 1976; 
Crude oil price (Dollars per gallon): $0.25; 
Gasoline price (Dollars per gallon): $0.60.

Month: March 1976; 
Crude oil price (Dollars per gallon): $0.25; 
Gasoline price (Dollars per gallon): $0.59.

Month: April 1976; 
Crude oil price (Dollars per gallon): $0.25; 
Gasoline price (Dollars per gallon): $0.59.

Month: May 1976; 
Crude oil price (Dollars per gallon): $0.25; 
Gasoline price (Dollars per gallon): $0.60.

Month: June 1976; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.62.

Month: July 1976; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.62.

Month: August 1976; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.63.

Month: September 1976; 
Crude oil price (Dollars per gallon): $0.26; 
Gasoline price (Dollars per gallon): $0.63.

Month: October 1976; 
Crude oil price (Dollars per gallon): $0.27; 
Gasoline price (Dollars per gallon): $0.63.

Month: November 1976; 
Crude oil price (Dollars per gallon): $0.27; 
Gasoline price (Dollars per gallon): $0.63.

Month: December 1976; 
Crude oil price (Dollars per gallon): $0.27; 
Gasoline price (Dollars per gallon): $0.63.

Month: January 1977; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $0.63.

Month: February 1977; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $0.64.

Month: March 1977; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $0.64.

Month: April 1977; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $0.65.

Month: May 1977; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $0.66.

Month: June 1977; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.67.

Month: July 1977; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $0.67.

Month: August 1977; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.67.

Month: September 1977; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.67.

Month: October 1977; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.67.

Month: November 1977; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.66.

Month: December 1977; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.67.

Month: January 1978; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.65.

Month: February 1978; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.65.

Month: March 1978; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.65.

Month: April 1978; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.65.

Month: May 1978; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.66.

Month: June 1978; 
Crude oil price (Dollars per gallon): $0.30; 
Gasoline price (Dollars per gallon): $0.66.

Month: July 1978; 
Crude oil price (Dollars per gallon): $0.30; 
Gasoline price (Dollars per gallon): $0.67.

Month: August 1978; 
Crude oil price (Dollars per gallon): $0.30; 
Gasoline price (Dollars per gallon): $0.68.

Month: September 1978; 
Crude oil price (Dollars per gallon): $0.30; 
Gasoline price (Dollars per gallon): $0.69.

Month: October 1978; 
Crude oil price (Dollars per gallon): $0.30; 
Gasoline price (Dollars per gallon): $0.69.

Month: November 1978; 
Crude oil price (Dollars per gallon): $0.30; 
Gasoline price (Dollars per gallon): $0.70.

Month: December 1978; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $0.71.

Month: January 1979; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $0.72.

Month: February 1979; 
Crude oil price (Dollars per gallon): $0.32; 
Gasoline price (Dollars per gallon): $0.73.

Month: March 1979; 
Crude oil price (Dollars per gallon): $0.33; 
Gasoline price (Dollars per gallon): $0.76.

Month: April 1979; 
Crude oil price (Dollars per gallon): $0.35; 
Gasoline price (Dollars per gallon): $0.80.

Month: May 1979; 
Crude oil price (Dollars per gallon): $0.37; 
Gasoline price (Dollars per gallon): $0.84.

Month: June 1979; 
Crude oil price (Dollars per gallon): $0.40; 
Gasoline price (Dollars per gallon): $0.90.

Month: July 1979; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $0.95.

Month: August 1979; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $0.99.

Month: September 1979; 
Crude oil price (Dollars per gallon): $0.48; 
Gasoline price (Dollars per gallon): $1.02.

Month: October 1979; 
Crude oil price (Dollars per gallon): $0.49; 
Gasoline price (Dollars per gallon): $1.03.

Month: November 1979; 
Crude oil price (Dollars per gallon): $0.52; 
Gasoline price (Dollars per gallon): $1.04.

Month: December 1979; 
Crude oil price (Dollars per gallon): $0.56; 
Gasoline price (Dollars per gallon): $1.07.

Month: January 1980; 
Crude oil price (Dollars per gallon): $0.59; 
Gasoline price (Dollars per gallon): $1.13.

Month: February 1980; 
Crude oil price (Dollars per gallon): $0.62; 
Gasoline price (Dollars per gallon): $1.21.

Month: March 1980; 
Crude oil price (Dollars per gallon): $0.64; 
Gasoline price (Dollars per gallon): $1.25.

Month: April 1980; 
Crude oil price (Dollars per gallon): $0.65; 
Gasoline price (Dollars per gallon): $1.26.

Month: May 1980; 
Crude oil price (Dollars per gallon): $0.66; 
Gasoline price (Dollars per gallon): $1.27.

Month: June 1980; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.27.

Month: July 1980; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.27.

Month: August 1980; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.27.

Month: September 1980; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.26.

Month: October 1980; 
Crude oil price (Dollars per gallon): $0.70; 
Gasoline price (Dollars per gallon): $1.25.

Month: November 1980; 
Crude oil price (Dollars per gallon): $0.71; 
Gasoline price (Dollars per gallon): $1.25.

Month: December 1980; 
Crude oil price (Dollars per gallon): $0.75; 
Gasoline price (Dollars per gallon): $1.26.

Month: January 1981; 
Crude oil price (Dollars per gallon): $0.83; 
Gasoline price (Dollars per gallon): $1.30.

Month: February 1981; 
Crude oil price (Dollars per gallon): $0.89; 
Gasoline price (Dollars per gallon): $1.38.

Month: March 1981; 
Crude oil price (Dollars per gallon): $0.89; 
Gasoline price (Dollars per gallon): $1.42.

Month: April 1981; 
Crude oil price (Dollars per gallon): $0.87; 
Gasoline price (Dollars per gallon): $1.41.

Month: May 1981; 
Crude oil price (Dollars per gallon): $0.86; 
Gasoline price (Dollars per gallon): $1.40.

Month: June 1981; 
Crude oil price (Dollars per gallon): $0.83; 
Gasoline price (Dollars per gallon): $1.39.

Month: July 1981; 
Crude oil price (Dollars per gallon): $0.83; 
Gasoline price (Dollars per gallon): $1.38.

Month: August 1981; 
Crude oil price (Dollars per gallon): $0.82; 
Gasoline price (Dollars per gallon): $1.38.

Month: September 1981; 
Crude oil price (Dollars per gallon): $0.81; 
Gasoline price (Dollars per gallon): $1.38.

Month: October 1981; 
Crude oil price (Dollars per gallon): $0.81; 
Gasoline price (Dollars per gallon): $1.37.

Month: November 1981; 
Crude oil price (Dollars per gallon): $0.82; 
Gasoline price (Dollars per gallon): $1.37.

Month: December 1981; 
Crude oil price (Dollars per gallon): $0.82; 
Gasoline price (Dollars per gallon): $1.37.

Month: January 1982; 
Crude oil price (Dollars per gallon): $0.81; 
Gasoline price (Dollars per gallon): $1.36.

Month: February 1982; 
Crude oil price (Dollars per gallon): $0.80; 
Gasoline price (Dollars per gallon): $1.33.

Month: March 1982; 
Crude oil price (Dollars per gallon): $0.76; 
Gasoline price (Dollars per gallon): $1.28.

Month: April 1982; 
Crude oil price (Dollars per gallon): $0.73; 
Gasoline price (Dollars per gallon): $1.23.

Month: May 1982; 
Crude oil price (Dollars per gallon): $0.74; 
Gasoline price (Dollars per gallon): $1.24.

Month: June 1982; 
Crude oil price (Dollars per gallon): $0.76; 
Gasoline price (Dollars per gallon): $1.31.

Month: July 1982; 
Crude oil price (Dollars per gallon): $0.76; 
Gasoline price (Dollars per gallon): $1.33.

Month: August 1982; 
Crude oil price (Dollars per gallon): $0.75; 
Gasoline price (Dollars per gallon): $1.32.

Month: September 1982; 
Crude oil price (Dollars per gallon): $0.75; 
Gasoline price (Dollars per gallon): $1.31.

Month: October 1982; 
Crude oil price (Dollars per gallon): $0.76; 
Gasoline price (Dollars per gallon): $1.30.

Month: November 1982; 
Crude oil price (Dollars per gallon): $0.76; 
Gasoline price (Dollars per gallon): $1.28.

Month: December 1982; 
Crude oil price (Dollars per gallon): $0.75; 
Gasoline price (Dollars per gallon): $1.26.

Month: January 1983; 
Crude oil price (Dollars per gallon): $0.73; 
Gasoline price (Dollars per gallon): $1.23.

Month: February 1983; 
Crude oil price (Dollars per gallon): $0.70; 
Gasoline price (Dollars per gallon): $1.19.

Month: March 1983; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.15.

Month: April 1983; 
Crude oil price (Dollars per gallon): $0.67; 
Gasoline price (Dollars per gallon): $1.22.

Month: May 1983; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.26.

Month: June 1983; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.28.

Month: July 1983; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.29.

Month: August 1983; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.29.

Month: September 1983; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.27.

Month: October 1983; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.26.

Month: November 1983; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.24.

Month: December 1983; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.23.

Month: January 1984; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.22.

Month: February 1984; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.21.

Month: March 1984; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.21.

Month: April 1984; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.23.

Month: May 1984; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.24.

Month: June 1984; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.23.

Month: July 1984; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.21.

Month: August 1984; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.20.

Month: September 1984; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.20.

Month: October 1984; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.21.

Month: November 1984; 
Crude oil price (Dollars per gallon): $0.67; 
Gasoline price (Dollars per gallon): $1.21.

Month: December 1984; 
Crude oil price (Dollars per gallon): $0.67; 
Gasoline price (Dollars per gallon): $1.19.

Month: January 1985; 
Crude oil price (Dollars per gallon): $0.64; 
Gasoline price (Dollars per gallon): $1.15.

Month: February 1985; 
Crude oil price (Dollars per gallon): $0.63; 
Gasoline price (Dollars per gallon): $1.13.

Month: March 1985; 
Crude oil price (Dollars per gallon): $0.64; 
Gasoline price (Dollars per gallon): $1.16.

Month: April 1985; 
Crude oil price (Dollars per gallon): $0.64; 
Gasoline price (Dollars per gallon): $1.21.

Month: May 1985; 
Crude oil price (Dollars per gallon): $0.65; 
Gasoline price (Dollars per gallon): $1.23.

Month: June 1985; 
Crude oil price (Dollars per gallon): $0.64; 
Gasoline price (Dollars per gallon): $1.24.

Month: July 1985; 
Crude oil price (Dollars per gallon): $0.63; 
Gasoline price (Dollars per gallon): $1.24.

Month: August 1985; 
Crude oil price (Dollars per gallon): $0.63; 
Gasoline price (Dollars per gallon): $1.23.

Month: September 1985; 
Crude oil price (Dollars per gallon): $0.63; 
Gasoline price (Dollars per gallon): $1.22.

Month: October 1985; 
Crude oil price (Dollars per gallon): $0.63; 
Gasoline price (Dollars per gallon): $1.20.

Month: November 1985; 
Crude oil price (Dollars per gallon): $0.64; 
Gasoline price (Dollars per gallon): $1.21.

Month: December 1985; 
Crude oil price (Dollars per gallon): $0.64; 
Gasoline price (Dollars per gallon): $1.21.

Month: January 1986; 
Crude oil price (Dollars per gallon): $0.61; 
Gasoline price (Dollars per gallon): $1.19.

Month: February 1986; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $1.12.

Month: March 1986; 
Crude oil price (Dollars per gallon): $0.35; 
Gasoline price (Dollars per gallon): $0.98.

Month: April 1986; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $0.89.

Month: May 1986; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $0.92.

Month: June 1986; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $0.96.

Month: July 1986; 
Crude oil price (Dollars per gallon): $0.27; 
Gasoline price (Dollars per gallon): $0.89.

Month: August 1986; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $0.84.

Month: September 1986; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $0.86.

Month: October 1986; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $0.83.

Month: November 1986; 
Crude oil price (Dollars per gallon): $0.32; 
Gasoline price (Dollars per gallon): $0.82.

Month: December 1986; 
Crude oil price (Dollars per gallon): $0.33; 
Gasoline price (Dollars per gallon): $0.82.

Month: January 1987; 
Crude oil price (Dollars per gallon): $0.38; 
Gasoline price (Dollars per gallon): $0.86.

Month: February 1987; 
Crude oil price (Dollars per gallon): $0.40; 
Gasoline price (Dollars per gallon): $0.91.

Month: March 1987; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $0.91.

Month: April 1987; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $0.93.

Month: May 1987; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $0.94.

Month: June 1987; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $0.96.

Month: July 1987; 
Crude oil price (Dollars per gallon): $0.46; 
Gasoline price (Dollars per gallon): $0.97.

Month: August 1987; 
Crude oil price (Dollars per gallon): $0.46; 
Gasoline price (Dollars per gallon): $1.00.

Month: September 1987; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $0.99.

Month: October 1987; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $0.98.

Month: November 1987; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $0.98.

Month: December 1987; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $0.96.

Month: January 1988; 
Crude oil price (Dollars per gallon): $0.37; 
Gasoline price (Dollars per gallon): $0.93.

Month: February 1988; 
Crude oil price (Dollars per gallon): $0.37; 
Gasoline price (Dollars per gallon): $0.91.

Month: March 1988; 
Crude oil price (Dollars per gallon): $0.35; 
Gasoline price (Dollars per gallon): $0.90.

Month: April 1988; 
Crude oil price (Dollars per gallon): $0.38; 
Gasoline price (Dollars per gallon): $0.93.

Month: May 1988; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $0.96.

Month: June 1988; 
Crude oil price (Dollars per gallon): $0.37; 
Gasoline price (Dollars per gallon): $0.96.

Month: July 1988; 
Crude oil price (Dollars per gallon): $0.35; 
Gasoline price (Dollars per gallon): $0.97.

Month: August 1988; 
Crude oil price (Dollars per gallon): $0.34; 
Gasoline price (Dollars per gallon): $0.99.

Month: September 1988; 
Crude oil price (Dollars per gallon): $0.33; 
Gasoline price (Dollars per gallon): $0.97.

Month: October 1988; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $0.96.

Month: November 1988; 
Crude oil price (Dollars per gallon): $0.30; 
Gasoline price (Dollars per gallon): $0.95.

Month: December 1988; 
Crude oil price (Dollars per gallon): $0.33; 
Gasoline price (Dollars per gallon): $0.93.

Month: January 1989; 
Crude oil price (Dollars per gallon): $0.37; 
Gasoline price (Dollars per gallon): $0.92.

Month: February 1989; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $0.93.

Month: March 1989; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $0.94.

Month: April 1989; 
Crude oil price (Dollars per gallon): $0.46; 
Gasoline price (Dollars per gallon): $1.07.

Month: May 1989; 
Crude oil price (Dollars per gallon): $0.45; 
Gasoline price (Dollars per gallon): $1.12.

Month: June 1989; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.11.

Month: July 1989; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.09.

Month: August 1989; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $1.06.

Month: September 1989; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.03.

Month: October 1989; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.03.

Month: November 1989; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.00.

Month: December 1989; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $0.98.

Month: January 1990; 
Crude oil price (Dollars per gallon): $0.49; 
Gasoline price (Dollars per gallon): $1.04.

Month: February 1990; 
Crude oil price (Dollars per gallon): $0.48; 
Gasoline price (Dollars per gallon): $1.04.

Month: March 1990; 
Crude oil price (Dollars per gallon): $0.46; 
Gasoline price (Dollars per gallon): $1.02.

Month: April 1990; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $1.04.

Month: May 1990; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.06.

Month: June 1990; 
Crude oil price (Dollars per gallon): $0.36; 
Gasoline price (Dollars per gallon): $1.09.

Month: July 1990; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.08.

Month: August 1990; 
Crude oil price (Dollars per gallon): $0.56; 
Gasoline price (Dollars per gallon): $1.19.

Month: September 1990; 
Crude oil price (Dollars per gallon): $0.72; 
Gasoline price (Dollars per gallon): $1.29.

Month: October 1990; 
Crude oil price (Dollars per gallon): $0.79; 
Gasoline price (Dollars per gallon): $1.38.

Month: November 1990; 
Crude oil price (Dollars per gallon): $0.73; 
Gasoline price (Dollars per gallon): $1.38.

Month: December 1990; 
Crude oil price (Dollars per gallon): $0.62; 
Gasoline price (Dollars per gallon): $1.35.

Month: January 1991; 
Crude oil price (Dollars per gallon): $0.54; 
Gasoline price (Dollars per gallon): $1.25.

Month: February 1991; 
Crude oil price (Dollars per gallon): $0.45; 
Gasoline price (Dollars per gallon): $1.14.

Month: March 1991; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.08.

Month: April 1991; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.10.

Month: May 1991; 
Crude oil price (Dollars per gallon): $0.45; 
Gasoline price (Dollars per gallon): $1.16.

Month: June 1991; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.16.

Month: July 1991; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.13.

Month: August 1991; 
Crude oil price (Dollars per gallon): $0.45; 
Gasoline price (Dollars per gallon): $1.14.

Month: September 1991; 
Crude oil price (Dollars per gallon): $0.46; 
Gasoline price (Dollars per gallon): $1.14.

Month: October 1991; 
Crude oil price (Dollars per gallon): $0.48; 
Gasoline price (Dollars per gallon): $1.12.

Month: November 1991; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $1.13.

Month: December 1991; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.12.

Month: January 1992; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.07.

Month: February 1992; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.05.

Month: March 1992; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.06.

Month: April 1992; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.08.

Month: May 1992; 
Crude oil price (Dollars per gallon): $0.45; 
Gasoline price (Dollars per gallon): $1.14.

Month: June 1992; 
Crude oil price (Dollars per gallon): $0.48; 
Gasoline price (Dollars per gallon): $1.18.

Month: July 1992; 
Crude oil price (Dollars per gallon): $0.48; 
Gasoline price (Dollars per gallon): $1.18.

Month: August 1992; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $1.16.

Month: September 1992; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $1.16.

Month: October 1992; 
Crude oil price (Dollars per gallon): $0.46; 
Gasoline price (Dollars per gallon): $1.15.

Month: November 1992; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.16.

Month: December 1992; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.14.

Month: January 1993; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $1.12.

Month: February 1993; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.11.

Month: March 1993; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.10.

Month: April 1993; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.11.

Month: May 1993; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.13.

Month: June 1993; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $1.13.

Month: July 1993; 
Crude oil price (Dollars per gallon): $0.38; 
Gasoline price (Dollars per gallon): $1.11.

Month: August 1993; 
Crude oil price (Dollars per gallon): $0.38; 
Gasoline price (Dollars per gallon): $1.10.

Month: September 1993; 
Crude oil price (Dollars per gallon): $0.37; 
Gasoline price (Dollars per gallon): $1.09.

Month: October 1993; 
Crude oil price (Dollars per gallon): $0.38; 
Gasoline price (Dollars per gallon): $1.13.

Month: November 1993; 
Crude oil price (Dollars per gallon): $0.35; 
Gasoline price (Dollars per gallon): $1.11.

Month: December 1993; 
Crude oil price (Dollars per gallon): $0.30; 
Gasoline price (Dollars per gallon): $1.07.

Month: January 1994; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $1.04.

Month: February 1994; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $1.05.

Month: March 1994; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $1.05.

Month: April 1994; 
Crude oil price (Dollars per gallon): $0.35; 
Gasoline price (Dollars per gallon): $1.06.

Month: May 1994; 
Crude oil price (Dollars per gallon): $0.38; 
Gasoline price (Dollars per gallon): $1.08.

Month: June 1994; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $1.11.

Month: July 1994; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.14.

Month: August 1994; 
Crude oil price (Dollars per gallon): $0.40; 
Gasoline price (Dollars per gallon): $1.18.

Month: September 1994; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.18.

Month: October 1994; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.15.

Month: November 1994; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.16.

Month: December 1994; 
Crude oil price (Dollars per gallon): $0.38; 
Gasoline price (Dollars per gallon): $1.14.

Month: January 1995; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.13.

Month: February 1995; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $1.12.

Month: March 1995; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $1.12.

Month: April 1995; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.14.

Month: May 1995; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.20.

Month: June 1995; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.23.

Month: July 1995; 
Crude oil price (Dollars per gallon): $0.40; 
Gasoline price (Dollars per gallon): $1.20.

Month: August 1995; 
Crude oil price (Dollars per gallon): $0.40; 
Gasoline price (Dollars per gallon): $1.16.

Month: September 1995; 
Crude oil price (Dollars per gallon): $0.40; 
Gasoline price (Dollars per gallon): $1.15.

Month: October 1995; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.13.

Month: November 1995; 
Crude oil price (Dollars per gallon): $0.40; 
Gasoline price (Dollars per gallon): $1.10.

Month: December 1995; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.10.

Month: January 1996; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.13.

Month: February 1996; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.12.

Month: March 1996; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $1.16.

Month: April 1996; 
Crude oil price (Dollars per gallon): $0.52; 
Gasoline price (Dollars per gallon): $1.25.

Month: May 1996; 
Crude oil price (Dollars per gallon): $0.49; 
Gasoline price (Dollars per gallon): $1.32.

Month: June 1996; 
Crude oil price (Dollars per gallon): $0.46; 
Gasoline price (Dollars per gallon): $1.30.

Month: July 1996; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $1.27.

Month: August 1996; 
Crude oil price (Dollars per gallon): $0.49; 
Gasoline price (Dollars per gallon): $1.24.

Month: September 1996; 
Crude oil price (Dollars per gallon): $0.52; 
Gasoline price (Dollars per gallon): $1.23.

Month: October 1996; 
Crude oil price (Dollars per gallon): $0.55; 
Gasoline price (Dollars per gallon): $1.23.

Month: November 1996; 
Crude oil price (Dollars per gallon): $0.54; 
Gasoline price (Dollars per gallon): $1.25.

Month: December 1996; 
Crude oil price (Dollars per gallon): $0.55; 
Gasoline price (Dollars per gallon): $1.26.

Month: January 1997; 
Crude oil price (Dollars per gallon): $0.56; 
Gasoline price (Dollars per gallon): $1.26.

Month: February 1997; 
Crude oil price (Dollars per gallon): $0.52; 
Gasoline price (Dollars per gallon): $1.26.

Month: March 1997; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $1.24.

Month: April 1997; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.23.

Month: May 1997; 
Crude oil price (Dollars per gallon): $0.45; 
Gasoline price (Dollars per gallon): $1.23.

Month: June 1997; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.23.

Month: July 1997; 
Crude oil price (Dollars per gallon): $0.42; 
Gasoline price (Dollars per gallon): $1.21.

Month: August 1997; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.25.

Month: September 1997; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.28.

Month: October 1997; 
Crude oil price (Dollars per gallon): $0.46; 
Gasoline price (Dollars per gallon): $1.24.

Month: November 1997; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.21.

Month: December 1997; 
Crude oil price (Dollars per gallon): $0.40; 
Gasoline price (Dollars per gallon): $1.18.

Month: January 1998; 
Crude oil price (Dollars per gallon): $0.36; 
Gasoline price (Dollars per gallon): $1.13.

Month: February 1998; 
Crude oil price (Dollars per gallon): $0.33; 
Gasoline price (Dollars per gallon): $1.08.

Month: March 1998; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $1.04.

Month: April 1998; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $1.05.

Month: May 1998; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $1.09.

Month: June 1998; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $1.09.

Month: July 1998; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $1.08.

Month: August 1998; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $1.05.

Month: September 1998; 
Crude oil price (Dollars per gallon): $0.31; 
Gasoline price (Dollars per gallon): $1.03.

Month: October 1998; 
Crude oil price (Dollars per gallon): $0.30; 
Gasoline price (Dollars per gallon): $1.04.

Month: November 1998; 
Crude oil price (Dollars per gallon): $0.28; 
Gasoline price (Dollars per gallon): $1.03.

Month: December 1998; 
Crude oil price (Dollars per gallon): $0.23; 
Gasoline price (Dollars per gallon): $0.99.

Month: January 1999; 
Crude oil price (Dollars per gallon): $0.25; 
Gasoline price (Dollars per gallon): $0.97.

Month: February 1999; 
Crude oil price (Dollars per gallon): $0.25; 
Gasoline price (Dollars per gallon): $0.96.

Month: March 1999; 
Crude oil price (Dollars per gallon): $0.29; 
Gasoline price (Dollars per gallon): $0.99.

Month: April 1999; 
Crude oil price (Dollars per gallon): $0.36; 
Gasoline price (Dollars per gallon): $1.18.

Month: May 1999; 
Crude oil price (Dollars per gallon): $0.38; 
Gasoline price (Dollars per gallon): $1.18.

Month: June 1999; 
Crude oil price (Dollars per gallon): $0.38; 
Gasoline price (Dollars per gallon): $1.15.

Month: July 1999; 
Crude oil price (Dollars per gallon): $0.43; 
Gasoline price (Dollars per gallon): $1.19.

Month: August 1999; 
Crude oil price (Dollars per gallon): $0.47; 
Gasoline price (Dollars per gallon): $1.26.

Month: September 1999; 
Crude oil price (Dollars per gallon): $0.52; 
Gasoline price (Dollars per gallon): $1.28.

Month: October 1999; 
Crude oil price (Dollars per gallon): $0.52; 
Gasoline price (Dollars per gallon): $1.27.

Month: November 1999; 
Crude oil price (Dollars per gallon): $0.55; 
Gasoline price (Dollars per gallon): $1.26.

Month: December 1999; 
Crude oil price (Dollars per gallon): $0.58; 
Gasoline price (Dollars per gallon): $1.30.

Month: January 2000; 
Crude oil price (Dollars per gallon): $0.61; 
Gasoline price (Dollars per gallon): $1.30.

Month: February 2000; 
Crude oil price (Dollars per gallon): $0.66; 
Gasoline price (Dollars per gallon): $1.37.

Month: March 2000; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.54.

Month: April 2000; 
Crude oil price (Dollars per gallon): $0.59; 
Gasoline price (Dollars per gallon): $1.51.

Month: May 2000; 
Crude oil price (Dollars per gallon): $0.63; 
Gasoline price (Dollars per gallon): $1.50.

Month: June 2000; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.62.

Month: July 2000; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.59.

Month: August 2000; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.51.

Month: September 2000; 
Crude oil price (Dollars per gallon): $0.74; 
Gasoline price (Dollars per gallon): $1.58.

Month: October 2000; 
Crude oil price (Dollars per gallon): $0.73; 
Gasoline price (Dollars per gallon): $1.56.

Month: November 2000; 
Crude oil price (Dollars per gallon): $0.74; 
Gasoline price (Dollars per gallon): $1.56.

Month: December 2000; 
Crude oil price (Dollars per gallon): $0.63; 
Gasoline price (Dollars per gallon): $1.49.

Month: January 2001; 
Crude oil price (Dollars per gallon): $0.61; 
Gasoline price (Dollars per gallon): $1.47.

Month: February 2001; 
Crude oil price (Dollars per gallon): $0.62; 
Gasoline price (Dollars per gallon): $1.48.

Month: March 2001; 
Crude oil price (Dollars per gallon): $0.57; 
Gasoline price (Dollars per gallon): $1.45.

Month: April 2001; 
Crude oil price (Dollars per gallon): $0.57; 
Gasoline price (Dollars per gallon): $1.56.

Month: May 2001; 
Crude oil price (Dollars per gallon): $0.60; 
Gasoline price (Dollars per gallon): $1.73.

Month: June 2001; 
Crude oil price (Dollars per gallon): $0.59; 
Gasoline price (Dollars per gallon): $1.64.

Month: July 2001; 
Crude oil price (Dollars per gallon): $0.57; 
Gasoline price (Dollars per gallon): $1.48.

Month: August 2001; 
Crude oil price (Dollars per gallon): $0.58; 
Gasoline price (Dollars per gallon): $1.43.

Month: September 2001; 
Crude oil price (Dollars per gallon): $0.57; 
Gasoline price (Dollars per gallon): $1.53.

Month: October 2001; 
Crude oil price (Dollars per gallon): $0.48; 
Gasoline price (Dollars per gallon): $1.36.

Month: November 2001; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $1.26.

Month: December 2001; 
Crude oil price (Dollars per gallon): $0.39; 
Gasoline price (Dollars per gallon): $1.13.

Month: January 2002; 
Crude oil price (Dollars per gallon): $0.41; 
Gasoline price (Dollars per gallon): $1.14.

Month: February 2002; 
Crude oil price (Dollars per gallon): $0.44; 
Gasoline price (Dollars per gallon): $1.13.

Month: March 2002; 
Crude oil price (Dollars per gallon): $0.52; 
Gasoline price (Dollars per gallon): $1.24.

Month: April 2002; 
Crude oil price (Dollars per gallon): $0.57; 
Gasoline price (Dollars per gallon): $1.41.

Month: May 2002; 
Crude oil price (Dollars per gallon): $0.60; 
Gasoline price (Dollars per gallon): $1.42.

Month: June 2002; 
Crude oil price (Dollars per gallon): $0.57; 
Gasoline price (Dollars per gallon): $1.40.

Month: July 2002; 
Crude oil price (Dollars per gallon): $0.60; 
Gasoline price (Dollars per gallon): $1.41.

Month: August 2002; 
Crude oil price (Dollars per gallon): $0.62; 
Gasoline price (Dollars per gallon): $1.42.

Month: September 2002; 
Crude oil price (Dollars per gallon): $0.66; 
Gasoline price (Dollars per gallon): $1.42.

Month: October 2002; 
Crude oil price (Dollars per gallon): $0.64; 
Gasoline price (Dollars per gallon): $1.45.

Month: November 2002; 
Crude oil price (Dollars per gallon): $0.59; 
Gasoline price (Dollars per gallon): $1.45.

Month: December 2002; 
Crude oil price (Dollars per gallon): $0.64; 
Gasoline price (Dollars per gallon): $1.39.

Month: January 2003; 
Crude oil price (Dollars per gallon): $0.73; 
Gasoline price (Dollars per gallon): $1.47.

Month: February 2003; 
Crude oil price (Dollars per gallon): $0.79; 
Gasoline price (Dollars per gallon): $1.64.

Month: March 2003; 
Crude oil price (Dollars per gallon): $0.73; 
Gasoline price (Dollars per gallon): $1.75.

Month: April 2003; 
Crude oil price (Dollars per gallon): $0.62; 
Gasoline price (Dollars per gallon): $1.66.

Month: May 2003; 
Crude oil price (Dollars per gallon): $0.61; 
Gasoline price (Dollars per gallon): $1.54.

Month: June 2003; 
Crude oil price (Dollars per gallon): $0.66; 
Gasoline price (Dollars per gallon): $1.51.

Month: July 2003; 
Crude oil price (Dollars per gallon): $0.68; 
Gasoline price (Dollars per gallon): $1.52.

Month: August 2003; 
Crude oil price (Dollars per gallon): $0.69; 
Gasoline price (Dollars per gallon): $1.63.

Month: September 2003; 
Crude oil price (Dollars per gallon): $0.63; 
Gasoline price (Dollars per gallon): $1.73.

Month: October 2003; 
Crude oil price (Dollars per gallon): $0.66; 
Gasoline price (Dollars per gallon): $1.60.

Month: November 2003; 
Crude oil price (Dollars per gallon): $0.67; 
Gasoline price (Dollars per gallon): $1.54.

Month: December 2003; 
Crude oil price (Dollars per gallon): $0.70; 
Gasoline price (Dollars per gallon): $1.49.

Month: January 2004; 
Crude oil price (Dollars per gallon): $0.74; 
Gasoline price (Dollars per gallon): $1.59.

Month: February 2004; 
Crude oil price (Dollars per gallon): $0.76; 
Gasoline price (Dollars per gallon): $1.67.

Month: March 2004; 
Crude oil price (Dollars per gallon): $0.79; 
Gasoline price (Dollars per gallon): $1.77.

Month: April 2004; 
Crude oil price (Dollars per gallon): $0.80; 
Gasoline price (Dollars per gallon): $1.83.

Month: May 2004; 
Crude oil price (Dollars per gallon): $0.86; 
Gasoline price (Dollars per gallon): $2.01.

Month: June 2004; 
Crude oil price (Dollars per gallon): $0.83; 
Gasoline price (Dollars per gallon): $2.04.

Month: July 2004; 
Crude oil price (Dollars per gallon): $0.87; 
Gasoline price (Dollars per gallon): $1.94.

Month: August 2004; 
Crude oil price (Dollars per gallon): $0.96; 
Gasoline price (Dollars per gallon): $1.90.

Month: September 2004; 
Crude oil price (Dollars per gallon): $0.98; 
Gasoline price (Dollars per gallon): $1.89.

Source: GAO analysis of EIA and BLS data.

Note: Crude oil price data are the monthly refiner acquisition cost of 
crude oil composite from EIA. Gasoline price data are the monthly U.S. 
city average price for regular gasoline from BLS.

[End of figure]

Q. What determines the price of crude oil?

A. The price of oil is determined in the world market and depends 
mainly on the balance between world demand and supply. That balance is 
in turn influenced by a number of other factors, as discussed below.

World Oil Demand:

Because oil is purchased and consumed in many countries, including the 
United States, at a price determined in the world market, changes in 
world demand--not just U.S. demand--can influence the price that U.S. 
refiners pay for crude oil and, consequently, the price that U.S. 
consumers pay for gasoline. As Figure 9 shows, since 1983 world oil 
demand grew from about 59 million barrels per day to more than 82 
million barrels per day in 2004, for an average annual increase of 1.9 
percent.

Figure 9: World Oil Demand (1980-2004):

[See PDF for image] 

Source: GAO analysis of EIA data.

[End of figure]

The United States is the world's largest oil consumer, accounting for 
about 25 percent of the world's demand, although it constitutes only 
about 5 percent of the world's population. As Figure 10 shows, the 
United States consumed about 20.5 million barrels of petroleum per day 
in 2004, compared with about 15.2 million barrels per day in 1983, for 
an average annual increase of 1.65 percent.

Figure 10: U.S. Oil Demand (1980-2004):

[See PDF for image] 

Source: GAO analysis of EIA data.

[End of figure]

Recently, rapid growth in oil demand in Asia contributed to a rise in 
crude oil prices to more than $50 per barrel during 2004. Growth in 
demand was particularly strong in China where, according to a recent 
estimate by the National Commission on Energy Policy,[Footnote 6] 
demand grew by 18 percent during the first quarter of 2004, after 
rising 11 percent in 2003.

An important aspect of oil demand is the difficulty of substituting 
other sources of energy for some petroleum products--particularly 
gasoline. In the immediate term at least, gasoline has virtually no 
cost-effective substitutes, and, therefore, increases in its price 
cause only small decreases in consumption.

World Oil Supply:

Unlike oil demand, which encompasses demand from most of the world's 
nations, currently, relatively few countries supply most of the world's 
oil because those are the countries that have oil reserves and 
production. World oil producers can be grouped into two broad 
categories--members of the Organization of Petroleum Exporting 
Countries (OPEC) and non-OPEC countries. OPEC currently has 11 members, 
and many of its major producers are located in the Persian Gulf 
region.[Footnote 7] Key non-OPEC producers include Russia, the United 
States, China, Mexico, Norway, Canada, and the United Kingdom.

As Figure 11 shows, non-OPEC countries, including the United States, 
have typically contributed the majority of the world's oil supply since 
the 1970s. Over the same period, the U.S. share of total world supply 
has decreased from about 23 percent in 1970 to about 10 percent in 
2004. The United States is importing increasingly larger shares of its 
oil use. In 2004, the United States imported about 13 million barrels 
of crude oil and petroleum products per day, representing about 60 
percent of total U.S. consumption. About 56 percent of the imports were 
from non-OPEC countries, of which Canada, Mexico, the United Kingdom, 
and Angola were key suppliers. OPEC supplied the remaining 44 percent 
of U.S. imports, mostly from Saudi Arabia, Venezuela, Nigeria, and 
Iraq. The Persian Gulf region accounted for about 19 percent of total 
U.S. imports of crude oil and petroleum products.[Footnote 8]

Figure 11: World Oil Supply (1970-2004):

[See PDF for image]

Source: GAO analysis of EIA data.

[End of figure]

While non-OPEC countries still contribute the majority of the world's 
oil supply, the share of world oil supplied by OPEC has increased since 
the mid-1980s and accounted for about 40 percent of world supply in 
2004. Overall, OPEC supply makes up the balance of world oil demand 
over non-OPEC supply. In its role as the world's demand-supply 
balancer, OPEC's supply decisions play a critical role in the 
determination of world oil price.

OPEC influences the world oil price mostly through its supply 
decisions. While the group had little or no influence on the world oil 
market during the first 10 years after it was formed in 1960, 
generally, it has been a dominant force in the world oil market since 
the 1970s. Its influence on the world price of crude oil has varied 
depending on the conditions of world supply and demand and its members' 
discipline in adhering to their production quotas. As a group, OPEC 
established a "target" price of $22 to $28 per barrel for its basket of 
crude oil in 2000.[Footnote 9] To achieve this target price, OPEC 
periodically meets and sets an aggregate production level, or quota, 
based on the organization's determination of the demand for its oil. 
(Fig. 12 shows an OPEC meeting.) OPEC then allocates voluntary 
production quotas among its members, primarily based on the size of 
each member's oil reserves. Whether the target price is achieved 
depends on the discipline exercised by member countries in producing 
oil, as well as on the actual demand for oil and non-OPEC countries' 
production levels. If OPEC's estimates of demand are correct and member 
countries adhere to their production quotas, the average world price 
will likely be close to the target price. On the other hand, if some or 
all members exceed their quotas and overproduce, the average world 
price may be substantially below the target price.

Figure 12: OPEC Meeting:

[See PDF for image]

Source: OPEC.

[End of figure]

If the world crude oil price exceeds the target price, OPEC may not 
always increase its production to bring the world price down to its 
target. For example, OPEC members decided in their December 2004 
meeting to cut production as of January 1, 2005, to keep the world 
price from falling, even though the then-current price of around $36 
per barrel for the OPEC basket of crude oil exceeded OPEC's target 
price of $22-28 per barrel.[Footnote 10] Two conditions give OPEC 
countries considerable flexibility to influence world oil prices:

* As a group, OPEC holds the world's largest, lowest-cost reserves of 
crude oil. OPEC countries account for over three-fourths of the world's 
estimated conventional reserves of about 1 trillion barrels (see Fig. 
13). In contrast, the United States has reserves of about 22.7 billion, 
or slightly less than 2 percent of the world's total.

Figure 13: World Oil Reserves, OPEC and Non-OPEC (2003):

[See PDF for image] -graphic text:

Two pie graphs, one with four items and one with ten items.

OPEC (all other): 557.2 billion barrels; 
OPEC (Saudi Arabia only): 261.8 billion barrels; 
Non-OPEC: 196.6 billion barrels; 
Non-OPEC: (United States only): 22.7 billion barrels.

OPEC (all other):

Iraq: 112.5 billion barrels; 
United Arab Emirates: 97.8 billion barrels; 
Kuwait: 96.5 billion barrels; 
Iran: 89.7 billion barrels; 
Venezuela: 77.8 billion barrels; 
Libya: 29.5 billion barrels; 
Nigeria: 24 billion barrels; 
Qatar: 15.2 billion barrels; 
Algeria: 9.2 billion barrels; 
Indonesia: 5 billion barrels.

Source: GAO analysis of EIA data.

Note: This estimate is for conventional crude oil and does not include 
bitumen contained in oil sands in Canada.

[End of figure]

* OPEC is the only entity that can increase crude oil production 
relatively quickly if there is supply shortage because it holds 
virtually all of the world's excess crude oil production capacity. In 
fact, according to EIA data, as of November 2004 Saudi Arabia had 
virtually all of the world's excess crude oil production capacity--up 
to 1 million barrels per day. (See Fig. 14.)

Figure 14: World Excess Crude Oil Production Capacity:

[See PDF for image] -graphic text:

Virtually all of the world's excess crude oil production capacity is 
located in Saudi Arabia, a member of OPEC (1 million barrels a day).

Source: GAO analysis of EIA data.

[End of figure]

Apart from OPEC's supply decisions, OPEC countries sometimes experience 
events that affect their oil supplies and the world price of crude oil. 
For example, the current and past wars in Iraq and strikes in Venezuela 
and Nigeria disrupted oil supplies and temporarily raised the price of 
crude oil.

The futures market typically reflects the impact of world events on the 
world price of crude oil. For example, political instability and 
terrorist acts in countries that supply oil create uncertainties about 
future supplies. Faced with such uncertainties, oil traders at futures 
markets such as the New York Mercantile Exchange may bid up futures 
prices for oil in anticipation of an oil shortage and expected higher 
prices in the future.[Footnote 11] On the other hand, oil traders may 
also bid futures prices down in reaction, for example, to news about a 
new oil discovery that would increase world oil supply and potentially 
lower the world price. In other words, market participants' 
expectations of what may happen to oil supply and demand in the context 
of world events influence their price bids. (See Fig. 15.) Although 
crude oil buyers may not always pay the exact price observed in the 
futures markets, the futures markets play a critical role in providing 
a leading reference price for buyers' and sellers' negotiations in 
crude oil transactions.

Figure 15: World Events, Market Expectations, and the Oil Futures 
Market:

[See PDF for image]

Sources: GAO (analysis); U.S. Army (photo).

[End of figure]

Q. How do changes in gasoline demand relative to supply affect the 
price?

A. As is the case for most goods and services, changes in the demand 
for gasoline relative to changes in supply affect the price that 
consumers pay. In other words, if the demand for gasoline increases 
faster than the ability to supply it, the price of gasoline will most 
likely increase.

In 2004, the United States consumed an average of about 380 million 
gallons (about 9 million barrels) of gasoline per day. This consumption 
is about 56 percent more than the 1970 average per day consumption of 
243 million gallons (about 5.8 million barrels)--an average increase of 
about 1.6 percent per year for the last 35 years. U.S. gasoline 
consumption has increased particularly steeply since the 1990s. (See 
Fig. 16.)

Figure 16: U.S. Gasoline Consumption (1970-2004):

[See PDF for image]

Source: GAO analysis of EIA data.

Notes: One barrel of gasoline equals 42 U.S. gallons.

This graph shows consumption of finished motor gasoline, which, 
beginning in 1993, also includes ethanol blended into motor gasoline.

[End of figure]

The United States is by far the largest consumer of gasoline in the 
world. As of 2001, the most recent year for which EIA data were 
available for international comparisons, the United States accounted 
for 43 percent of the world's total gasoline consumption. (See Fig. 
17.) 

Figure 17: World Gasoline Consumption (2001):

[See PDF for image] -graphic text:

Pie graph with eight items.

United States: 43%; 
Asia and Oceania: 17%; 
Western Europe: 14%; 
Central and South America: 7%; 
Rest of North America[A]: 6%; 
Eastern Europe and the former Soviet Union: 6%; 
Middle East: 4%; 
Africa: 3%.

Source: GAO analysis of EIA data.

Notes: 2001 data are the latest available.

[A] According to EIA, this group consists of Canada, Mexico, Bermuda, 
Greenland, Saint Pierre, and Miquelon, with consumption by Canada and 
Mexico making up the majority.

[End of figure]

Most gasoline consumed in the United States is used for automobile 
transportation, particularly passenger cars, vans, pickups, and sport 
utility vehicles (SUV). Average fuel efficiency for passenger cars, as 
measured in miles per gallon of gasoline consumed, increased from about 
13.5 miles per gallon in 1973 (the earliest year for which data were 
available) to about 22 miles per gallon in 2003. Average fuel 
efficiency for vans, pickups, and SUVs also increased during that 
period, from about 10.5 miles per gallon to 18 miles per gallon. 
However, since 1992, fuel efficiency performance for both vehicle 
categories has remained almost flat. (See Fig. 18.)

Figure 18: Fuel Efficiency of Automobiles in the United States (1973- 
2003):

[See PDF for image] -graphic text:

Line graph with two lines with 31 items each.

Year: 1973; 
Passenger cars (miles per gallon): 13.4; 
Vans, pickups and SUVs (miles per gallon): 10.5.

Year: 1974; 
Passenger cars (miles per gallon): 13.6; 
Vans, pickups and SUVs (miles per gallon): 11.

Year: 1975; 
Passenger cars (miles per gallon): 14; 
Vans, pickups and SUVs (miles per gallon): 10.5.

Year: 1976; 
Passenger cars (miles per gallon): 13.8; 
Vans, pickups and SUVs (miles per gallon): 10.8.

Year: 1977; 
Passenger cars (miles per gallon): 14.1; 
Vans, pickups and SUVs (miles per gallon): 11.2.

Year: 1978; 
Passenger cars (miles per gallon): 14.3; 
Vans, pickups and SUVs (miles per gallon): 11.6.

Year: 1979; 
Passenger cars (miles per gallon): 14.6; 
Vans, pickups and SUVs (miles per gallon): 11.9.

Year: 1980; 
Passenger cars (miles per gallon): 16; 
Vans, pickups and SUVs (miles per gallon): 12.2.

Year: 1981; 
Passenger cars (miles per gallon): 16.5; 
Vans, pickups and SUVs (miles per gallon): 12.5.

Year: 1982; 
Passenger cars (miles per gallon): 16.9; 
Vans, pickups and SUVs (miles per gallon): 13.5.

Year: 1983; 
Passenger cars (miles per gallon): 17.1; 
Vans, pickups and SUVs (miles per gallon): 13.7.

Year: 1984; 
Passenger cars (miles per gallon): 17.4; 
Vans, pickups and SUVs (miles per gallon): 14.

Year: 1985; 
Passenger cars (miles per gallon): 17.5; 
Vans, pickups and SUVs (miles per gallon): 14.3.

Year: 1986; 
Passenger cars (miles per gallon): 17.4; 
Vans, pickups and SUVs (miles per gallon): 14.6.

Year: 1987; 
Passenger cars (miles per gallon): 18; 
Vans, pickups and SUVs (miles per gallon): 14.9.

Year: 1988; 
Passenger cars (miles per gallon): 18.8; 
Vans, pickups and SUVs (miles per gallon): 15.4.

Year: 1989; 
Passenger cars (miles per gallon): 19; 
Vans, pickups and SUVs (miles per gallon): 16.1.

Year: 1990; 
Passenger cars (miles per gallon): 20.2; 
Vans, pickups and SUVs (miles per gallon): 16.1.

Year: 1991; 
Passenger cars (miles per gallon): 21.1; 
Vans, pickups and SUVs (miles per gallon): 17.

Year: 1992; 
Passenger cars (miles per gallon): 21; 
Vans, pickups and SUVs (miles per gallon): 17.3.

Year: 1993; 
Passenger cars (miles per gallon): 20.5; 
Vans, pickups and SUVs (miles per gallon): 17.4.

Year: 1994; 
Passenger cars (miles per gallon): 20.7; 
Vans, pickups and SUVs (miles per gallon): 17.3.

Year: 1995; 
Passenger cars (miles per gallon): 21.1; 
Vans, pickups and SUVs (miles per gallon): 17.3.

Year: 1996; 
Passenger cars (miles per gallon): 21.2; 
Vans, pickups and SUVs (miles per gallon): 17.2.

Year: 1997; 
Passenger cars (miles per gallon): 21.5; 
Vans, pickups and SUVs (miles per gallon): 17.2.

Year: 1998; 
Passenger cars (miles per gallon): 21.6; 
Vans, pickups and SUVs (miles per gallon): 17.2.

Year: 1999; 
Passenger cars (miles per gallon): 21.4; 
Vans, pickups and SUVs (miles per gallon): 17.

Year: 2000; 
Passenger cars (miles per gallon): 21.9; 
Vans, pickups and SUVs (miles per gallon): 17.4.

Year: 2001; 
Passenger cars (miles per gallon): 22.1; 
Vans, pickups and SUVs (miles per gallon): 17.6.

Year: 2002; 
Passenger cars (miles per gallon): 22; 
Vans, pickups and SUVs (miles per gallon): 17.5.

Year: 2003; 
Passenger cars (miles per gallon): 22.3; 
Vans, pickups and SUVs (miles per gallon): 17.7.

Source: GAO analysis of EIA data.

[End of figure]

As Figure 19 shows, gasoline consumption by passenger cars has been 
relatively stable since 1980 compared with consumption by vans, pickups 
and SUVs, which has increased more steeply as these larger, less fuel- 
efficient vehicles have become a growing part of the automotive fleet. 
Taken together, Figures 16, 18, and 19 suggest that most of the 
increased U.S. gasoline consumption over the last 2 decades has been 
due to these larger vehicles.

Figure 19: U.S. Gasoline Consumption by Type of Vehicle (1980-2002):

[See PDF for image] -graphic text:

Line graph with two lines with 23 items each.

Billions of gallons annually:

Year: 1980; 
Cars: 70.2; 
Vans, Pickups, SUVs: 23.8.

Year: 1981; 
Cars: 69.3; 
Vans, Pickups, SUVs: 23.7.

Year: 1982; 
Cars: 69.3; 
Vans, Pickups, SUVs: 22.7.

Year: 1983; 
Cars: 70.5; 
Vans, Pickups, SUVs: 23.9.

Year: 1984; 
Cars: 70.8; 
Vans, Pickups, SUVs: 25.6.

Year: 1985; 
Cars: 71.7; 
Vans, Pickups, SUVs: 27.4.

Year: 1986; 
Cars: 73.4; 
Vans, Pickups, SUVs: 29.1.

Year: 1987; 
Cars: 73.5; 
Vans, Pickups, SUVs: 30.6.

Year: 1988; 
Cars: 73.5; 
Vans, Pickups, SUVs: 32.7.

Year: 1989; 
Cars: 74.1; 
Vans, Pickups, SUVs: 33.3.

Year: 1990; 
Cars: 69.8; 
Vans, Pickups, SUVs: 35.6.

Year: 1991; 
Cars: 64.5; 
Vans, Pickups, SUVs: 38.2.

Year: 1992; 
Cars: 65.6; 
Vans, Pickups, SUVs: 40.9.

Year: 1993; 
Cars: 67.2; 
Vans, Pickups, SUVs: 42.9.

Year: 1994; 
Cars: 68.1; 
Vans, Pickups, SUVs: 44.1.

Year: 1995; 
Cars: 68.1; 
Vans, Pickups, SUVs: 45.6.

Year: 1996; 
Cars: 69.2; 
Vans, Pickups, SUVs: 47.4.

Year: 1997; 
Cars: 69.9; 
Vans, Pickups, SUVs: 49.4.

Year: 1998; 
Cars: 71.1; 
Vans, Pickups, SUVs: 50.5.

Year: 1999; 
Cars: 73.2; 
Vans, Pickups, SUVs: 52.8.

Year: 2000; 
Cars: 73.1; 
Vans, Pickups, SUVs: 52.9.

Year: 2001; 
Cars: 73.6; 
Vans, Pickups, SUVs: 53.5.

Year: 2002; 
Cars: 74.9; 
Vans, Pickups, SUVs: 54.8.

Source: GAO analysis of Department of Commerce data.

Q. Can U.S. refineries produce as much gasoline as consumers demand?

A. The number of refineries in the United States has significantly 
decreased since 1981 as many, mostly smaller and inefficient refineries 
have been shut down or mothballed. Refiners have been able to expand 
the capacity of existing refineries (see Fig. 20), but such "capacity 
creep" has not kept pace with growing demand for petroleum products.

Figure 20: Refinery Capacity and Number of Refineries (1980-2004):

[See PDF for image]

Source: GAO analysis of EIA data.

[End of figure]

To meet the growing demand, U.S. refineries have been running close to 
their production capacity since the 1990s, as shown by the tightening 
balance between the amount of refinery input--such as crude oil and 
condensates--and refinery capacity (see Fig. 21).

U.S. Refinery Capacity and Input (1980-2004):

[See PDF for image]

Source: GAO analysis of EIA data.

[End of figure]

Put differently, refineries are running at high rates of utilization. 
For example, U.S. refineries, on average, have been utilizing over 93 
percent of their production capacity since the mid-1990s, compared with 
about 77.6 percent in the 1980s. When refineries are already running at 
such high capacity utilization rates, they have little ability to 
further increase production as demand increases. Also, high utilization 
rates can increase operating costs and lead to higher prices. We have 
reported that refinery capacity utilization rates of over 90 percent 
contributed to higher gasoline prices at the wholesale level in the 
second half of the 1990s.[Footnote 12] Complicating the tightening 
refinery capacity relative to demand is the fact that no new refineries 
have been built in the United States since the 1970s. This fact was 
noted as a continuing concern by many industry officials with whom we 
spoke.

Many offered explanations for the lack of new refineries, including 
that building a new refinery requires a capital investment of billions 
of dollars and that relatively low and volatile refining margins have 
decreased the incentive to invest in the refining sector.[Footnote 13] 
We did not assess whether U.S. refining margins are low. However, as 
shown in Figure 22, refining margins in the U.S. have been volatile and 
vary among regions, according to data from 1995 through 2004. According 
to EIA officials, differences in refining margins among regions may be 
explained by factors such as differences in the level of investments in 
refineries in those regions. For example, they noted that the margins 
on the West Coast are higher than in the other regions, as shown in 
Figure 22, perhaps reflecting the large investments that West Coast 
refiners made to upgrade their refineries to produce California's 
unique gasoline blend.

Figure 22: Refining Margins Adjusted for Inflation (1995-2004):

[See PDF for image] -graphic text:

Line graph with four lines with 115 items each.

Dollars per barrel of oil processed:

Month: Jan 1995; 
East Coast: $1.52; 
Gulf Coast: $1.31; 
Midwest: -$1.79; 
West Coast: $5.82.

Month: Feb 1995; 
East Coast: $0.53; 
Gulf Coast: $0.91; 
Midwest: -$2.64; 
West Coast: $3.76.

Month: Mar 1995; 
East Coast: -$0.68; 
Gulf Coast: $0.6; 
Midwest: $0.23; 
West Coast: $4.13.

Month: Apr 1995; 
East Coast: $0.33; 
Gulf Coast: $3.52; 
Midwest: $2.04; 
West Coast: $5.46.

Month: May 1995; 
East Coast: $4.51; 
Gulf Coast: $5.96; 
Midwest: $5.75; 
West Coast: $5.83.

Month: Jun 1995; 
East Coast: $4.14; 
Gulf Coast: $3.87; 
Midwest: $4.24; 
West Coast: $4.67.

Month: Jul 1995; 
East Coast: $2.72; 
Gulf Coast: $2.96; 
Midwest: $3.37; 
West Coast: $7.4.

Month: Aug 1995; 
East Coast: $3.32; 
Gulf Coast: $4.06; 
Midwest: $2.98; 
West Coast: $7.2.

Month: Sep 1995; 
East Coast: $4.06; 
Gulf Coast: $4.15; 
Midwest: $4.26; 
West Coast: $8.99.

Month: Oct 1995; 
East Coast: $1.63; 
Gulf Coast: $2.11; 
Midwest: $1.14; 
West Coast: $11.15.

Month: Nov 1995; 
East Coast: $1.64; 
Gulf Coast: $1.87; 
Midwest: $1.4; 
West Coast: $10.08.

Month: Dec 1995; 
East Coast: $3.02; 
Gulf Coast: $1.34; 
Midwest: $1.54; 
West Coast: $6.98.

Month: Jan 1996; 
East Coast: $1.51; 
Gulf Coast: $1.6; 
Midwest: $0.15; 
West Coast: $4.22.

Month: Feb 1996; 
East Coast: $2.6; 
Gulf Coast: $2.22; 
Midwest: $2.4; 
West Coast: $7.35.

Month: Mar 1996; 
East Coast: $2.46; 
Gulf Coast: $2.37; 
Midwest: $2.7; 
West Coast: $6.06.

Month: Apr 1996; 
East Coast: $3.66; 
Gulf Coast: $3.17; 
Midwest: $3.2; 
West Coast: $13.21.

Month: May 1996; 
East Coast: $3.89; 
Gulf Coast: $3.94; 
Midwest: $6.45; 
West Coast: $12.29.

Month: Jun 1996; 
East Coast: $1.29; 
Gulf Coast: $2.26; 
Midwest: $3.89; 
West Coast: $9.41.

Month: Jul 1996; 
East Coast: $1.87; 
Gulf Coast: $2.91; 
Midwest: $2.75; 
West Coast: $8.62.

Month: Aug 1996; 
East Coast: $1.65; 
Gulf Coast: $2.37; 
Midwest: $2.34; 
West Coast: $8.24.

Month: Sep 1996; 
East Coast: $1.2; 
Gulf Coast: $1.64; 
Midwest: $1.22; 
West Coast: $9.43.

Month: Oct 1996; 
East Coast: $1.67; 
Gulf Coast: $2.62; 
Midwest: $1.35; 
West Coast: $5.11.

Month: Nov 1996; 
East Coast: $4.52; 
Gulf Coast: $4.74; 
Midwest: $5.65; 
West Coast: $4.05.

Month: Dec 1996; 
East Coast: $2.11; 
Gulf Coast: $1.64; 
Midwest: $0.12; 
West Coast: $3.37.

Month: Jan 1997; 
East Coast: $0.68; 
Gulf Coast: $2.03; 
Midwest: $0.75; 
West Coast: $5.32.

Month: Feb 1997; 
East Coast: $1.61; 
Gulf Coast: $4.05; 
Midwest: $3.14; 
West Coast: $9.38.

Month: Mar 1997; 
East Coast: $3.38; 
Gulf Coast: $6.03; 
Midwest: $3.91; 
West Coast: $12.56.

Month: Apr 1997; 
East Coast: $4.93; 
Gulf Coast: $6.18; 
Midwest: $6.93; 
West Coast: $11.23.

Month: May 1997; 
East Coast: $3.79; 
Gulf Coast: $5.12; 
Midwest: $6.65; 
West Coast: $4.23.

Month: Jun 1997; 
East Coast: $2.81; 
Gulf Coast: $4.76; 
Midwest: $5.87; 
West Coast: $4.09.

Month: Jul 1997; 
East Coast: $3.61; 
Gulf Coast: $5.92; 
Midwest: $5.41; 
West Coast: $4.41.

Month: Aug 1997; 
East Coast: $7.59; 
Gulf Coast: $8.27; 
Midwest: $7.31; 
West Coast: $13.2.

Month: Sep 1997; 
East Coast: $4.01; 
Gulf Coast: $4.53; 
Midwest: $3.63; 
West Coast: $13.72.

Month: Oct 1997; 
East Coast: $1.22; 
Gulf Coast: $1.89; 
Midwest: $0.73; 
West Coast: $7.86.

Month: Nov 1997; 
East Coast: $0.5; 
Gulf Coast: $1.95; 
Midwest: $1.56; 
West Coast: $5.29.

Month: Dec 1997; 
East Coast: $1.2; 
Gulf Coast: $3.3; 
Midwest: $0.87; 
West Coast: $7.33.

Month: Jan 1998; 
East Coast: $2.24; 
Gulf Coast: $4.54; 
Midwest: $1.06; 
West Coast: $6.86.

Month: Feb 1998; 
East Coast: $2.13; 
Gulf Coast: $4.95; 
Midwest: $3.12; 
West Coast: $7.55.

Month: Mar 1998; 
East Coast: $2.77; 
Gulf Coast: $5.94; 
Midwest: $3.72; 
West Coast: $8.14.

Month: Apr 1998; 
East Coast: $2.93; 
Gulf Coast: $6.29; 
Midwest: $6.46; 
West Coast: $12.65.

Month: May 1998; 
East Coast: $2.67; 
Gulf Coast: $6.27; 
Midwest: $7.85; 
West Coast: $10.93.

Month: Jun 1998; 
East Coast: $4.91; 
Gulf Coast: $6.75; 
Midwest: $8.75; 
West Coast: $8.56.

Month: Jul 1998; 
East Coast: $2.08; 
Gulf Coast: $4.17; 
Midwest: $5.19; 
West Coast: $6.

Month: Aug 1998; 
East Coast: $1.14; 
Gulf Coast: $3.06; 
Midwest: $2.94; 
West Coast: $7.12.

Month: Sep 1998; 
East Coast: $1.75; 
Gulf Coast: $3.88; 
Midwest: $2.25; 
West Coast: $4.76.

Month: Oct 1998; 
East Coast: $2.92; 
Gulf Coast: $4.42; 
Midwest: $1.86; 
West Coast: $5.56.

Month: Nov 1998; 
East Coast: $1.69; 
Gulf Coast: $1.96; 
Midwest: $0.04; 
West Coast: $7.68.

Month: Dec 1998; 
East Coast: -$0.46; 
Gulf Coast: $1.49; 
Midwest: -$1.42; 
West Coast: $8.09.

Month: Jan 1999; 
East Coast: -$1.09; 
Gulf Coast: $1.59; 
Midwest: -$1.01; 
West Coast: $5.79.

Month: Feb 1999; 
East Coast: -$2.3; 
Gulf Coast: $0.68; 
Midwest: -$4.03; 
West Coast: $7.36.

Month: Mar 1999; 
East Coast: $1.87; 
Gulf Coast: $4.28; 
Midwest: $2.04; 
West Coast: $19.07.

Month: Apr 1999; 
East Coast: $0.56; 
Gulf Coast: $3.09; 
Midwest: $2.77; 
West Coast: $13.14.

Month: May 1999; 
East Coast: -$0.34; 
Gulf Coast: $0.9; 
Midwest: $1.62; 
West Coast: $5.02.

Month: Jun 1999; 
East Coast: $0.38; 
Gulf Coast: $2.18; 
Midwest: $2.9; 
West Coast: $15.94.

Month: Jul 1999; 
East Coast: $1.39; 
Gulf Coast: $3.37; 
Midwest: $3.07; 
West Coast: $19.16.

Month: Aug 1999; 
East Coast: $2.83; 
Gulf Coast: $3.34; 
Midwest: $3.34; 
West Coast: $12.81.

Month: Sep 1999; 
East Coast: $1.93; 
Gulf Coast: $2.31; 
Midwest: $1.56; 
West Coast: $2.68.

Month: Oct 1999; 
East Coast: $0.23; 
Gulf Coast: $1.36; 
Midwest: $0.86; 
West Coast: $5.59.

Month: Nov 1999; 
East Coast: $0.82; 
Gulf Coast: $1.87; 
Midwest: $2.56; 
West Coast: $5.82.

Month: Dec 1999; 
East Coast: -$0.84; 
Gulf Coast: $1.05; 
Midwest: $0.33; 
West Coast: $3.15.

Month: Jan 2000; 
East Coast: $4.97; 
Gulf Coast: $3.26; 
Midwest: $2.19; 
West Coast: $6.11.

Month: Feb 2000; 
East Coast: $3.63; 
Gulf Coast: $4.17; 
Midwest: $4.24; 
West Coast: $7.64.

Month: Mar 2000; 
East Coast: $3.75; 
Gulf Coast: $5.2; 
Midwest: $4.81; 
West Coast: $14.47.

Month: Apr 2000; 
East Coast: $5.4; 
Gulf Coast: $6.18; 
Midwest: $7.23; 
West Coast: $7.83.

Month: May 2000; 
East Coast: $5; 
Gulf Coast: $6.99; 
Midwest: $9.56; 
West Coast: $7.27.

Month: Jun 2000; 
East Coast: $3.5; 
Gulf Coast: $5.46; 
Midwest: $11.02; 
West Coast: $5.9.

Month: Jul 2000; 
East Coast: $3.33; 
Gulf Coast: $4.27; 
Midwest: $2.76; 
West Coast: $8.2.

Month: Aug 2000; 
East Coast: $4.39; 
Gulf Coast: $5.25; 
Midwest: $3.71; 
West Coast: $13.22.

Month: Sep 2000; 
East Coast: $4.06; 
Gulf Coast: $4.73; 
Midwest: $4.68; 
West Coast: $14.11.

Month: Oct 2000; 
East Coast: $4.44; 
Gulf Coast: $4.35; 
Midwest: $6.14; 
West Coast: $11.66.

Month: Nov 2000; 
East Coast: $3.76; 
Gulf Coast: $4.1; 
Midwest: $4.56; 
West Coast: $9.67.

Month: Dec 2000; 
East Coast: $3.82; 
Gulf Coast: $3.74; 
Midwest: $3.96; 
West Coast: $10.42.

Month: Jan 2001; 
East Coast: $2.6; 
Gulf Coast: $4.51; 
Midwest: $4.12; 
West Coast: $4.96.

Month: Feb 2001; 
East Coast: $1.88; 
Gulf Coast: $4.63; 
Midwest: $4.01; 
West Coast: $9.41.

Month: Mar 2001; 
East Coast: $3.19; 
Gulf Coast: $6.01; 
Midwest: $5.94; 
West Coast: $11.86.

Month: Apr 2001; 
East Coast: $7.42; 
Gulf Coast: $10.36; 
Midwest: $12.72; 
West Coast: $13.21.

Month: May 2001; 
East Coast: $6.58; 
Gulf Coast: $8.73; 
Midwest: $16.17; 
West Coast: $10.44.

Month: Jun 2001; 
East Coast: $1.55; 
Gulf Coast: $4.06; 
Midwest: $8; 
West Coast: $8.36.

Month: Jul 2001; 
East Coast: $1.09; 
Gulf Coast: $2.88; 
Midwest: $4.96; 
West Coast: $2.84.

Month: Aug 2001; 
East Coast: $2.7; 
Gulf Coast: $6.17; 
Midwest: $13.06; 
West Coast: $11.86.

Month: Sep 2001; 
East Coast: $2.36; 
Gulf Coast: $5.29; 
Midwest: $15.64; 
West Coast: $19.56.

Month: Oct 2001; 
East Coast: $4.27; 
Gulf Coast: $4.88; 
Midwest: $10.23; 
West Coast: $16.9.

Month: Nov 2001; 
East Coast: $0.72; 
Gulf Coast: $2.59; 
Midwest: $6.8; 
West Coast: $7.

Month: Dec 2001; 
East Coast: $1.21; 
Gulf Coast: $3.12; 
Midwest: $3.87; 
West Coast: $6.

Month: Jan 2002; 
East Coast: $0.41; 
Gulf Coast: $3.23; 
Midwest: $1.56; 
West Coast: $5.69.

Month: Feb 2002; 
East Coast: -$0.88; 
Gulf Coast: $2.07; 
Midwest: $1.05; 
West Coast: $6.03.

Month: Mar 2002; 
East Coast: $0.75; 
Gulf Coast: $4.99; 
Midwest: $4.62; 
West Coast: $9.84.

Month: Apr 2002; 
East Coast: $1.28; 
Gulf Coast: $3.43; 
Midwest: $3.94; 
West Coast: $4.14.

Month: May 2002; 
East Coast: $0.43; 
Gulf Coast: $1.43; 
Midwest: $4.58; 
West Coast: $2.13.

Month: Jun 2002; 
East Coast: $1.46; 
Gulf Coast: $2.66; 
Midwest: $6.29; 
West Coast: $7.58.

Month: Jul 2002; 
East Coast: $1.91; 
Gulf Coast: $2.97; 
Midwest: $5.18; 
West Coast: $4.1.

Month: Aug 2002; 
East Coast: $0.99; 
Gulf Coast: $1.92; 
Midwest: $4.36; 
West Coast: $3.9.

Month: Sep 2002; 
East Coast: $0.92; 
Gulf Coast: $2.5; 
Midwest: $5.46; 
West Coast: $3.68.

Month: Oct 2002; 
East Coast: $2.56; 
Gulf Coast: $4.38; 
Midwest: $8.79; 
West Coast: $4.15.

Month: Nov 2002; 
East Coast: $3.03; 
Gulf Coast: $2.91; 
Midwest: $5.29; 
West Coast: $5.64.

Month: Dec 2002; 
East Coast: $0.77; 
Gulf Coast: $2.65; 
Midwest: $2.99; 
West Coast: $2.22.

Month: Jan 2003; 
East Coast: $0.76; 
Gulf Coast: $2; 
Midwest: $1.44; 
West Coast: $2.02.

Month: Feb 2003; 
East Coast: $4.99; 
Gulf Coast: $5.57; 
Midwest: $6.62; 
West Coast: $6.57.

Month: Mar 2003; 
East Coast: $2.82; 
Gulf Coast: $3.39; 
Midwest: $4.67; 
West Coast: $6.84.

Month: Apr 2003; 
East Coast: $4.08; 
Gulf Coast: $4.38; 
Midwest: $7.2; 
West Coast: $6.51.

Month: May 2003; 
East Coast: $2.88; 
Gulf Coast: $2.65; 
Midwest: $5.81; 
West Coast: $3.35.

Month: Jun 2003; 
East Coast: $0.62; 
Gulf Coast: $1.43; 
Midwest: $4.26; 
West Coast: $3.76.

Month: Jul 2003; 
East Coast: $2.07; 
Gulf Coast: $2.77; 
Midwest: $4.73; 
West Coast: $3.88.

Month: Aug 2003; 
East Coast: $5.1; 
Gulf Coast: $5.22; 
Midwest: $8.66; 
West Coast: $12.98.

Month: Sep 2003; 
East Coast: $3.72; 
Gulf Coast: $3.47; 
Midwest: $7.74; 
West Coast: $4.61.

Month: Oct 2003; 
East Coast: $2.11; 
Gulf Coast: $3.46; 
Midwest: $5.94; 
West Coast: $6.49.

Month: Nov 2003; 
East Coast: $0.88; 
Gulf Coast: $2.19; 
Midwest: $3.35; 
West Coast: $7.25.

Month: Dec 2003; 
East Coast: $0.51; 
Gulf Coast: $2.1; 
Midwest: $1.84; 
West Coast: $5.28.

Month: Jan 2004; 
East Coast: $2.57; 
Gulf Coast: $4.53; 
Midwest: $3.2; 
West Coast: $5.23.

Month: Feb 2004; 
East Coast: $3.64; 
Gulf Coast: $5.08; 
Midwest: $4.55; 
West Coast: $11.71.

Month: Mar 2004; 
East Coast: $2.82; 
Gulf Coast: $5.42; 
Midwest: $5.6; 
West Coast: $9.43.

Month: Apr 2004; 
East Coast: $4.37; 
Gulf Coast: $6.94; 
Midwest: $8.65; 
West Coast: $14.65.

Month: May 2004; 
East Coast: $7.69; 
Gulf Coast: $8.26; 
Midwest: $10.34; 
West Coast: $16.31.

Month: Jun 2004; 
East Coast: $4.56; 
Gulf Coast: $5.78; 
Midwest: $7.21; 
West Coast: $9.59.

Month: Jul 2004; 
East Coast: $4.42; 
Gulf Coast: $6.34; 
Midwest: $6.99; 
West Coast: $9.96.

Source: GAO analysis of data from Muse, Stancil and Co.

Note: We used monthly refining margins adjusted to 2003 dollars using 
BLS's Producer Price Index for Crude Energy Materials. According to 
Muse, Stancil and Co., a private energy consulting firm, refining 
margins are an indicator of refinery earnings before interest, income 
taxes, depreciation and amortization.

[End of figure]

Some industry representatives also stated that investment in refineries 
is discouraged by the difficulty in obtaining a permit from the 
relevant state or local authorities to retrofit or build a refinery in 
many parts of the country, owing to regulatory hurdles and local public 
opposition to siting refineries.

Some policymakers have offered other views, suggesting that the tight 
refining capacity and higher gasoline prices are not entirely due to 
the factors discussed above. For example, a 2002 report by the majority 
sta. of the Permanent Subcommittee on Investigations of the U.S. Senate 
stated that a lack of competition in the petroleum industry allows 
industry participants to make business decisions that intentionally 
limit refining capacity and, hence, limit gasoline supply to create 
opportunities for higher prices.[Footnote 14]

Evaluating the views of industry and others is beyond the scope of this 
primer.

Q. How does the United States balance gasoline supply and demand?

A. U.S. refiners typically achieve the balance of gasoline supply and 
demand not met by refinery production by drawing from gasoline in 
inventory and by importing gasoline. Gasoline inventory is particularly 
crucial to this balance because it can provide a cushion against price 
spikes if a refinery outage temporarily disrupts production. However, 
maintaining such an inventory entails costs. As Figure 23 shows, U.S. 
gasoline inventory has decreased substantially during the last 2-1/2 
decades. While U.S. oil companies held enough gasoline in inventory to 
cover about 40 days of average U.S. consumption in the early 1980s, by 
2004 the gasoline they held in inventory could cover less than 23 days' 
consumption.[Footnote 15] In part, this decline reflects a trend in 
business to more closely balance production with demand to reduce the 
cost of holding large inventories. Nonetheless, some industry watchers 
consider low inventories a key factor contributing to increased 
gasoline price volatility in recent years.[Footnote 16]

Figure 23: Days of Average U.S. Gasoline Consumption That Could Be 
Covered by Gasoline in Inventory (1970-2004):

[See PDF for image]

Source: GAO analysis of EIA data.

[End of figure]

Also, as demand has grown steadily and refinery capacity tightened, the 
United States has imported larger and larger volumes of gasoline-- 
especially since the mid-1990s (see Fig. 24).

Figure 24: U.S. Gasoline Imports (1970-2004):

[See PDF for image]

Source: GAO analysis of EIA data.

Note: One barrel of gasoline equals 42 U.S. gallons.

[End of figure]

Imports accounted for about 1 percent of total U.S. gasoline 
consumption in 1970, rising to about 10 percent in 2004, or about 38 
million gallons per day. Major sources of U.S. gasoline imports include 
Canada, Europe, and the Virgin Islands. According to EIA officials, 
this increase in imports reflects, in part, the availability of 
gasoline from foreign sources at lower cost than building and operating 
additional refinery capacity in the United States would entail, 
potentially dampening the overall price of gasoline for U.S. consumers. 
Nonetheless, because it can take several weeks for gasoline to get to 
the United States from some of these areas, imported gasoline may not 
be effective in cushioning price spikes caused by temporary supply 
disruptions.

As the need for imported gasoline increases, the United States may face 
problems in accommodating enough imports, at least in some parts of the 
country. According to industry representatives, marine terminals where 
tankers bring petroleum products, especially in California, are not 
equipped to handle a growing supply of gasoline from abroad.

Q. How have government requirements for special blends of gasoline 
affected the price of gasoline?

A. Federal and state government requirements to use special gasoline 
blends, often as part of overall efforts to improve air quality, can 
increase the costs of producing gasoline, which may be passed on to 
consumers in the form of higher gasoline prices. Under the Clean Air 
Act, as amended, the federal government and some states now require the 
use of a variety of gasolines, generally in areas not in compliance 
with federal air quality standards. The number of such special gasoline 
blends has grown over time and, as of the summer of 2004, there were at 
least 11 different blends, in addition to the more commonly used 
conventional gasoline. Seasonal and other factors, such as multiple 
octane grades, can raise this number to nearly 50 gasoline blends over 
the course of a year. To produce some of these gasoline blends, 
refiners have incurred extra costs, such as investing in additional 
refinery units. They also incur additional costs to produce or purchase 
the blending components used to make special gasoline blends. For 
example, the Environmental Protection Agency and the Department of 
Energy have estimated the cost of producing reformulated gasoline--a 
special-blend gasoline mandated by the federal government--to be 
approximately 4 to 8 cents per gallon greater than conventional 
gasoline. (See section 4 of this primer for further discussion of the 
use of special gasoline blends.) A detailed analysis of the effects of 
special blends of gasoline will be presented in a GAO study to be 
issued this year.

Q. Why are gasoline prices generally higher during certain times of the 
year?

A. As Figure 25 illustrates, average U.S. retail gasoline prices 
generally rise sharply in the spring, peaking around Memorial Day. 
Prices then begin to fall and stabilize somewhat in the summer-- 
although they remain substantially higher than in winter. Prices rise 
again leading up to Labor Day, after which they usually fall steeply 
for winter.

Figure 25: Average U.S. Monthly Gasoline Prices (2000-2004):

[See PDF for image] -graphic text:

Line graph with 12 items.

Month: January; 
Average Dollars per gallon, 2000-2004: $1.53.

Month: February; 
Average Dollars per gallon, 2000-2004: $1.56.

Month: March; 
Average Dollars per gallon, 2000-2004: $1.61.

Month: April; 
Average Dollars per gallon, 2000-2004: $1.65.

Month: May; 
Average Dollars per gallon, 2000-2004: $1.66.

Month: June; 
Average Dollars per gallon, 2000-2004: $1.62.

Month: July; 
Average Dollars per gallon, 2000-2004: $1.59.

Month: August; 
Average Dollars per gallon, 2000-2004: $1.59.

Month: September; 
Average Dollars per gallon, 2000-2004: $1.61.

Month: October; 
Average Dollars per gallon, 2000-2004: $1.62.

Month: November; 
Average Dollars per gallon, 2000-2004: $1.60.

Month: December; 
Average Dollars per gallon, 2000-2004: $1.52.

Source: GAO analysis of BLS data.

Note: Data are monthly prices for regular motor gasoline, U.S. city 
averages. Gasoline prices were adjusted to 2003 dollars using BLS's 
Consumer Price Index for All Urban Consumers: Energy.

[End of figure]

Several factors may help explain this pattern. First, U.S. gasoline 
consumption fluctuates depending on the seasons. As Figure 26 
illustrates using data for 2000 through 2004, within any given year, 
gasoline consumption in the United States is generally higher from May 
through early September--the summer driving season--and tends to 
flatten out after Labor Day. The increased summer demand puts more 
pressure on the supply system, and prices rise in anticipation of this 
pressure.

Figure 26: Average U.S. Monthly Gasoline Consumption (2000-2004):

[See PDF for image] -graphic text:

Line graph with one line with 12 items.

Month: January; 
Average Barrels per day in millions, 2000-2004: 8.2.

Month: February; 
Average Barrels per day in millions, 2000-2004: 8.5.

Month: March; 
Average Barrels per day in millions, 2000-2004: 8.6.

Month: April; 
Average Barrels per day in millions, 2000-2004: 8.7.

Month: May; 
Average Barrels per day in millions, 2000-2004: 8.9.

Month: June; 
Average Barrels per day in millions, 2000-2004: 9.0.

Month: July; 
Average Barrels per day in millions, 2000-2004: 9.0.

Month: August; 
Average Barrels per day in millions, 2000-2004: 9.1.

Month: September; 
Average Barrels per day in millions, 2000-2004: 8.7.

Month: October; 
Average Barrels per day in millions, 2000-2004: 8.8.

Month: November; 
Average Barrels per day in millions, 2000-2004: 8.8.

Month: December; 
Average Barrels per day in millions, 2000-2004: 8.8.

Source: GAO analysis of EIA data.

Note: One barrel of gasoline equals 42 U.S. gallons.

[End of figure]

The second factor is the routine maintenance work on refineries that is 
generally performed during the first and fourth quarters of the year. 
This maintenance work requires shutting down parts of refineries over a 
period of weeks. Although the maintenance schedule is typically planned 
in advance to reduce the likelihood of a supply shortfall, sometimes 
maintenance can take longer than expected because of unforeseen 
problems. Such extended outages can further reduce inventories and 
threaten the demand-supply balance. According to one industry 
representative, even a rumor about such an extended outage can trigger 
higher prices in the affected markets because of fears of a potential 
supply shortage.

The third factor is the transition from winter-grade gasoline to summer-
grade gasoline. As part of efforts to improve air quality, some areas 
of the country are required to use a type of gasoline in the summer 
that has lower evaporation rates than winter-grade gasoline. To prepare 
for the switch from winter-grade to summer-grade gasoline, industry 
representatives told us that they start shrinking the inventory of 
winter-grade gasoline in the spring. The 2002 report by the Senate 
Permanent Subcommittee on Investigations summarized how the 
Environmental Protection Agency described the effects of low spring 
inventories on price as follows:

Although gasoline prices generally rise around Memorial Day, the start 
of the summer driving season, for the past two years spikes have 
occurred in various parts of the United States. These price spikes 
occur when gasoline inventories have become unusually low. Low gasoline 
inventories have occurred for a variety of reasons, including a recent 
trend in the petroleum industry towards reducing inventories to near 
the minimum operating levels. This has been particularly the case 
recently during the winter to summer transition. Additionally, because 
it costs refiners more to make summer grade fuel than winter grade 
fuel, competitive economic pressures lead refiners to delay this 
expense as long as possible.[Footnote 17]

Q. How have gasoline taxes contributed to changes in gasoline price 
over time?

A. Taxes are a significant component of the price of gasoline, and the 
average federal and state taxes on a gallon of gasoline have increased 
from 24.5 cents in 1990 to 37.5 cents in 2004. However, most of the 
increase occurred in 1994 or earlier; therefore, changes in gasoline 
taxes have not been a major reason for recent fluctuations in gasoline 
prices. As Figure 27 shows, federal gasoline taxes changed in December 
1990 and again in October 1993 and have remained relatively constant at 
18.4 cents per gallon since then. State taxes on gasoline vary among 
states (see sec. 4), but the average for all states has fluctuated 
slightly over time and actually decreased in 2001 from 20.17 cents per 
gallon to 19.07 cents per gallon. From 2001 to 2004, total federal and 
state taxes remained steady at about 37.5 cents per gallon,[Footnote 
18] while average retail gasoline prices, adjusted for inflation, 
increased by about 25 percent during that time.

Figure 27: Federal and State Gasoline Taxes on a Gallon of Gasoline 
(1990-2004):

[See PDF for image] -graphic text:

Line graph with two lines with 15 items each.

Year: 1990; 
Federal tax (cents per gallon): 9.10; 
State tax (cents per gallon): 15.47.

Year: 1991; 
Federal tax (cents per gallon): 14.10; 
State tax (cents per gallon): 17.55.

Year: 1992; 
Federal tax (cents per gallon): 14.10; 
State tax (cents per gallon): 17.99.

Year: 1993; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 18.34.

Year: 1994; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 18.51.

Year: 1995; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 18.50.

Year: 1996; 
Federal tax (cents per gallon): 18.30; 
State tax (cents per gallon): 18.67.

Year: 1997; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 19.05.

Year: 1998; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 19.96.

Year: 1999; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 19.29.

Year: 2000; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 20.17.

Year: 2001; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 19.07.

Year: 2002; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 19.13.

Year: 2003; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 19.10.

Year: 2004; 
Federal tax (cents per gallon): 18.40; 
State tax (cents per gallon): 19.10.

Source: GAO analysis of Federal Highway Administration data provided by 
EIA.

[End of figure]

Q. How have the mergers that occurred in the petroleum industry in the 
1990s affected competition and the price of gasoline?

A. Mergers between companies in the U.S. petroleum industry can reduce 
competition in the gasoline market. Reduced competition can lead to 
higher prices because, holding other things constant, the less 
competition there is among sellers, the more likely it is that 
companies can exert control over prices and raise the prices that 
consumers will pay. However, mergers can also lead to lower prices if 
industry achieves cost savings that are passed on to consumers. The 
Federal Trade Commission (FTC) reviews proposed mergers in the 
petroleum industry and has taken actions on some proposed mergers to 
preserve competition. For example, according to the FTC, from 1981 to 
2004, 15 proposed petroleum mergers would have resulted in significant 
reductions in competition and harmed consumers in one or more relevant 
markets. Four of the mergers were abandoned or blocked as a result of 
FTC or court action, while in the other 11 cases, the FTC required the 
merging companies to divest substantial assets in the markets where 
competitive harm was likely to occur.

We reported in May 2004 that over 2,600 mergers have occurred in the 
petroleum industry since the 1990s,[Footnote 19] some involving oil 
companies that had previously competed with each other. (See Fig. 28.)

Figure 28: Selected Major Petroleum Mergers (1996-2002):

[See PDF for image]

Source: GAO.

[End of figure]

Our study found that mergers contributed to reduced competition in the 
industry. Moreover, the mergers we reviewed generally led to average 
price increases of about 1 cent to 2 cents per gallon for wholesale 
gasoline during the second half of the 1990s, although two of the 
mergers generally led to price decreases of about 1 cent per gallon, on 
average. Other factors discussed in this primer also contributed to 
price changes during the period of the study. While our study did not 
examine the mergers' effect on retail gasoline prices, it did note that 
retail gasoline prices generally follow the same trends as wholesale 
gasoline markets, with some lag.

[End of section]

Section 4: Geographic Variations in Gasoline Price:

Q. Why do gasoline prices vary from place to place?

A. Retail gasoline prices can vary from one region of the United States 
to another, between and within states and cities, and even within 
neighborhoods. One reason for these variations is proximity to the 
supply used to meet regional demand. Additional reasons include 
differences in the gasoline used--that is, conventional or special 
blend gasoline mandated by federal and/or state regulation to meet 
clean air requirements in some areas; differences in taxes at the state 
and/or local levels; and differences in the extent of competition in 
local retail markets, including competition between retailers that sell 
name-brand gasoline sold under the refiner's trademark such as Exxon or 
Shell and those selling unbranded (generic) gasoline. These reasons are 
discussed in further detail in the answers to subsequent questions in 
this section.

Q. How does proximity to the source of supply affect the price of 
gasoline?

A. As Figure 29 shows, most regions of the country rely on gasoline 
shipments from other regions to meet their gasoline demand. In 
September 2004, for example, only the Gulf Coast region produced 
significantly more gasoline than it consumed, and it was the only 
region to send gasoline to each of the other four regions. The Gulf 
Coast region's excess gasoline production capacity contributes to its 
generally low average gasoline prices compared with other regions of 
the country. For example, as shown in Figure 30, during the week of 
March 21, 2005, consumers in the Gulf Coast region paid an average of 
$2.02 per gallon for regular gasoline--the lowest price in the nation. 
In contrast, consumers on the West Coast paid an average of $2.25 per 
gallon,[Footnote 20] Midwest consumers paid an average of $2.11, and 
consumers on the East Coast and in the Rocky Mountains paid an average 
of $2.07.

Figure 29: Gasoline Production and Consumption by U.S. Region 
(September 2004):

[See PDF for image] -graphic text:

Bar graph with ten items superimposed on a map of the continental 
United States.

Barrels per day in thousands.

Gulf Coast; 
Production: 3,487; 
Consumption: 1,780.

Finished Gulf Coast gasoline flows to all regions of the U.S.

East Coast; 
Production: 1,306; 
Consumption: 2,817.

Finished East Coast gasoline flows to the Midwest.

Midwest; 
Production: 1,944; 
Consumption: 2,588.

Finished Midwest gasoline flows to the Rockies.

Rockies; 
Production: 282; 
Consumption: 303.

Finished Rockies' gasoline flows to the West Coast.

West Coast; 
Production: 1,523; 
Consumption: 1,514.

Source: GAO analysis of EIA data.

Note: Arrows represent net flow of finished motor gasoline between 
regions.

[End of figure]

Q. How do differences in the types of gasoline used cause geographic 
variations in gasoline price?

A. Some areas of the country require the use of special blends of 
gasoline to meet clean air standards and provide health benefits. There 
were 12 distinct gasoline blends in use in various locations throughout 
the United States during the summer of 2004: 11 special gasoline blends 
and the conventional gasoline used everywhere that a special blend is 
not (see Fig. 31). Supplying special gasoline blends generally involves 
increased production, transportation, and storage costs, and these 
costs may be passed on to consumers as higher gasoline prices. For 
example, California's high gasoline price--the highest in the country-
-has been partly attributed to its unique blend of gasoline. Areas that 
use special-blend gasoline are also more susceptible to price spikes 
because such requirements have made gasoline less fungible across 
geographic markets. In other words, because of the requirements for 
special gasoline blends in certain markets, refiners have limited 
flexibility to ship gasoline from a surplus market to a market that may 
be experiencing a deficit and hence price spikes due to a supply 
disruption. Environmental Protection Agency officials told us that 
while the use of special gasoline blends may have some added costs, 
their studies have shown that, overall, the environmental and health 
benefits outweigh the costs.

Figure 30: Average Regional Gasoline Prices (Week of March 21, 2005):

[See PDF for image]

Source: GAO analysis of EIA data.

Note: Price is for regular gasoline, all formulations.

[End of figure]

Figure 31: Special Gasoline Blends in Use during the Summer of 2004:

[See PDF for image]

Legend: Numbers in parentheses indicate the number of counties in which 
the special blend was used.

Source: GAO analysis of data provided by EPA, ExxonMobil, the Oil Price 
Information Service, and state environmental agencies.

Note: Unshaded areas are where conventional gasoline is used. RVP = 
Reid Vapor Pressure, a measure of gasoline's tendency to evaporate. CBG 
= Cleaner-burning gasoline. RFG = Reformulated gasoline.

[End of figure]

Q. How do geographic differences in taxes affect gasoline prices?

A. Differences in gasoline taxes help explain why gasoline prices vary 
from place to place in the United States. In addition to federal taxes, 
which apply across the board, states and, in some cases, local 
jurisdictions also impose taxes and other fees on gasoline that add to 
the price. Figure 32 shows total gasoline taxes for each of the 50 
states and the District of Columbia, as of November 2004. New York, 
Hawaii, and California have the highest total gasoline taxes, while 
Alaska, Wyoming, and New Jersey have the lowest. While differences in 
taxes affect the price of gasoline, there is no consistent relationship 
between high taxes and high prices. For example, on March 7, 2005, 
gasoline cost $1.91 per gallon in North Carolina and $1.98 per gallon 
in Alaska, even though the taxes paid in North Carolina were almost 17 
cents per gallon higher.

Figure 32: Estimated Total Gasoline Taxes by State (November 2004):

[See PDF for image]

Source: GAO analysis of API data.

Note: According to API, these tax data include applicable state sales 
taxes, gross receipts taxes, and other applicable fees but largely 
exclude local taxes, which may average about 2 cents per gallon 
nationwide.

[End of figure]

Differences in the level of taxes imposed on gasoline also help explain 
why U.S. consumers, on average, pay far less for gasoline than 
consumers in some other nations. As Figure 33 shows, the United States 
has, by far, the lowest average gasoline tax of the major 
industrialized nations, including oil-producing countries such as 
Canada and the United Kingdom. For these industrialized U.S. 
counterparts, gasoline taxes ranged from the equivalent of $1 per 
gallon in Canada to over $4 in the United Kingdom.

Figure 33: Gasoline Taxes in Selected Industrialized Countries 
(November 2004):

[See PDF for image] -graphic text:

Bar graph with eight items.

U.S. dollars per gallon:

UK: $4.21.
Germany: $4.01.
France: $3.78.
Italy: $3.72.
Spain: $2.57.
Japan: $2.17.
Canada: $0.98.
USA: $0.40.

Source: GAO analysis of International Energy Agency data.

[End of figure]

As Figure 34 shows, when taxes are excluded, gasoline prices in the 
United States are generally comparable to the prices in most of the 
other nations.

Figure 34: Average Gasoline Prices without Taxes in Selected 
Industrialized Countries (November 2004):

[See PDF for image] -graphic text:

Bar graph with eight items.

U.S. dollars per gallon:
Japan: $2.38.
Italy: $2.03.
Spain: $1.87.
UK: $1.73.
Germany: $1.67.
Canada: $1.62.
USA: $1.59.
France: $1.56.

Source: GAO analysis of International Energy Agency data.

[End of figure]

Q. How does local competition affect gasoline prices?

A. While retailers will normally seek to set their prices to cover 
their costs and make a profit, retail gasoline prices are strongly 
influenced in the short run by the extent of competition within a local 
market. Nationwide, the number of gasoline stations has shrunk 
significantly--from over 202,000 in 1994 to about 167,000 in 2003, a 17 
percent decrease. These nationwide data provide some broad insight but 
cannot be used as a measure of retail market competition because retail 
gasoline markets are more local than national. Some markets have more 
competing gasoline stations within the vicinity than others, allowing 
consumers more options to shop around for lower prices. In general, 
areas with many competing gasoline stations tend to have lower average 
prices than areas with fewer competing stations, presumably because 
gasoline retailers closely watch the pricing by other neighboring 
retailers and keep the retail price competitive so as to preserve 
market share and profitability. For example, we previously reported 
that one reason why San Francisco consumers paid higher gasoline prices 
than those in Los Angeles, based on 1996 data, was that there were 
about 19 gasoline stations in San Francisco for every 100,000 people, 
while there were about 25 stations per 100,000 people in Los 
Angeles.[Footnote 21] Our study found that the high costs of land and 
some zoning regulations limited the siting and operation of gasoline 
stations in San Francisco more than in Los Angeles. Our study also 
found that higher per capita incomes in San Francisco, compared with 
Los Angeles, may have been a factor in explaining why gasoline prices 
were higher in San Francisco because higher incomes may make the demand 
for gasoline less price-sensitive.

The extent of local competition is at the heart of a practice in 
gasoline marketing known as "zone pricing" that helps explain why 
prices may differ at stations located in neighboring markets, such as 
neighboring towns, or between pockets of stations within the same area. 
As described in the 2002 Senate Permanent Subcommittee on 
Investigations report, oil companies typically group the retail 
stations that sell gasoline under the companies' trademark (brand) into 
geographic or market zones, which can comprise several stations or as 
few as one station. [Footnote 22] The companies then charge different 
wholesale prices to retailers by zone. Oil companies create zones 
essentially by determining how high a station can raise its price 
before it starts to lose market share. [Footnote 23] Since retailers 
typically seek to set their prices to cover their costs and make a 
profit, the wholesale price charged within a given zone plays a large 
part in determining the retail price charged to consumers.

Q. How does competition between name-brand and unbranded gasoline 
affect price?

A. Among the competitors for consumers' gasoline dollars are retailers 
that sell name-brand gasoline and retailers that sell unbranded 
gasoline. Which one you choose can affect the price you pay, and areas 
with more unbranded retailers generally tend to have lower prices, all 
things being equal.

Name-brand gasoline is generally higher priced than unbranded gasoline 
because its price tends to include a premium reflecting the recognized 
brand name, advertising costs, and guaranteed supply, among other 
things. Retailers of unbranded gasoline generally offer lower prices 
because that is how they attract customers. Unbranded retailers may 
also pay lower wholesale prices for their gasoline because, 
traditionally, they have been able to shop around in the wholesale 
marketplace, without any binding contracts, for the best price. 
However, this situation may be changing because some wholesale 
suppliers of unbranded gasoline are now requiring buyers to sign a 
binding contract to guarantee their supply. Unbranded retailers without 
such contracts may end up paying higher wholesale prices than name- 
brand retailers during periods of overall supply scarcity relative to 
demand, such as when there is a supply disruption caused by a pipeline 
or refinery breakdown.

The growing role of hypermarkets--a relatively new breed of gasoline 
retailers that includes such large retail warehouses as Wal-Mart and 
Costco--has added to the dynamics of gasoline retail competition. These 
hypermarkets, which sell mostly unbranded gasoline, have been gaining 
market share through aggressive pricing strategies. In particular, many 
gasoline distributors contend that hypermarkets use their gasoline as a 
"loss leader" to draw consumers in and thereby subsidizing gasoline 
sales with profits from store sales.

[End of section]

Appendix I: Scope and Methodology:

To identify the key factors that influence gasoline prices, we reviewed 
our existing work on oil and gasoline markets as well as that of the 
U.S. Department of Energy's Energy Information Administration (EIA), 
the industry, and others. We examined the process by which gasoline 
gets to the consumer from the crude oil stage to the pump--to 
understand what factors influence that process and ultimately affect 
the price of gasoline. To gain more insight into trends in gasoline 
prices and the relationships between gasoline price and the factors 
that influence it, we extensively analyzed a large body of information, 
including data from EIA, the International Energy Agency, the Bureau of 
Labor Statistics, and the American Petroleum Institute. We also used 
data from Muse, Stancil and Co., a private energy consulting firm. To 
assess the reliability of these data sets, we interviewed individuals 
with knowledge of them and reviewed available documentation on the 
collection of the data and on any methods that were used in calculating 
the data.

From this review, we determined that the data sets were sufficiently 
reliable for our purposes. The time periods for the data we used in our 
analysis are not necessarily synchronized for all the charts and graphs 
in the report because, in most cases, we used data covering the entire 
time period for the data series in order to put our analysis in the 
broadest possible context. However, we have specified the applicable 
time period for each chart or graph presented. For our review, we also 
interviewed experts and representatives in the industry, trade 
associations, financial markets, and government agencies.

We conducted our review from July 2004 through April 2005 in accordance 
with generally accepted government auditing standards.

[End of section]

RELATED GAO PRODUCTS:

Energy Markets: Mergers and Other Factors That Affect the U.S. Refining 
Industry. GAO-04-982T. Washington, D.C.: July 15, 2004.

Energy Markets: Mergers and Many Other Factors Affect U.S. Gasoline 
Markets. GAO-04-951T. Washington, D.C.: July 7, 2004.

Energy Markets: Effects of Mergers and Market Concentration in the U.S. 
Petroleum Industry. GAO-04-96. Washington, D.C.: May 17, 2004.

Motor Fuels: California Gasoline Price Behavior. GAO/RCED-00-121. 
Washington, D.C.: April 28, 2000.

Motor Fuels: Gasoline Price Spikes in Oregon in 1999. GAO/RCED-00-100R. 
Washington, D.C.: February 23, 2000.

Energy Security: Evaluating U.S. Vulnerability to Oil Supply 
Disruptions and Options for Mitigating Their Effects. GAO/RCED-97-6. 
Washington, D.C.: December 12, 1996.

Energy Security and Policy: Analysis of the Pricing of Crude Oil and 
Petroleum Products. GAO/RCED-93-17. Washington, D.C.: March 19, 1993.

Tax Policy: Additional Petroleum Production Tax Incentives Are of 
Questionable Merit. GAO/GGD-90-75. Washington, D.C.: July 23, 1990.

(360491):

[End of section]

FOOTNOTES:

[1] This primer does not explore whether changes in gasoline prices are 
related to any industry anticompetitive behavior that may be prohibited 
by law. Such investigations are outside the scope of our study and fall 
under the jurisdiction of regulatory or law enforcement agencies such 
as the Federal Trade Commission and the Justice Department.

[2] EIA is an independent agency within the U.S. Department of Energy 
that collects energy data.

[3] In the industry, low-sulfur light crude oil is referred to as 
"light sweet," while high-sulfur heavy crude oil is referred to as 
"heavy sour.":

[4] Crude oil extraction is preceded by activities that include 
acquiring or leasing land and exploring for crude oil, but for the 
purposes of this study we have omitted these activities.

[5] EIA uses tax data from the American Petroleum Institute (API) for 
its tax analysis. According to API, these data include applicable state 
sales taxes, gross receipts taxes, and other applicable fees but 
largely exclude local taxes, which may average about 2 cents per gallon 
nationwide.

[6] The National Commission on Energy Policy is a bipartisan commission 
of industry, academic, and government officials.

[7] As of April 2005, OPEC's members are Algeria, Indonesia, Iran, 
Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab 
Emirates, and Venezuela.

[8] Persian Gulf countries include Bahrain, Iran, Iraq, Kuwait, Qatar, 
Saudi Arabia, and United Arab Emirates. According to EIA data, the 
United States did not import crude oil or petroleum products from 
Bahrain or Iran.

[9] OPEC's "basket" price, which was introduced in 1987, is a weighted 
average price of seven crude oils from Algeria, Dubai, Indonesia, 
Mexico, Nigeria, Saudi Arabia, and Venezuela.

[10] Because oil is traded in U.S. dollars worldwide, the current fall 
in the dollar value relative to other major currencies may be affecting 
the overall purchasing power of OPEC members, who receive their oil 
proceeds in dollars, and it is not clear if and how that might be 
influencing their oil pricing policy.

[11] The other futures markets where oil is traded are the 
International Petroleum Exchange of London and the Singapore Mercantile 
Exchange in Singapore.

[12] See GAO, Energy Markets: Effects of Mergers and Market 
Concentration in the U.S. Petroleum Industry, GAO-04-96 (Washington, 
D.C.: May 17, 2004).

[13] A recent study by the National Petroleum Council reported that 
from 1981 through 2002, returns in the petroleum industry as a whole 
averaged 11.3 percent, slightly lower than the 12.2 percent average for 
the companies in the Standard and Poor's 500 index. The study also 
indicated that returns in the refining and marketing sector had 
historically been lower than in the rest of the petroleum industry. See 
National Petroleum Council, Observations on Petroleum Product Supply a 
Supplement to the NPC Reports: U.S. Petroleum Product Supply--Inventory 
Dynamics, 1998 and U.S. Petroleum Refining--Assuring the Adequacy and 
Affordability of Cleaner Fuels, 2000 (Washington, D.C., December 2004), 
1-14.

[14] United States Senate Permanent Subcommittee on Investigations, 
Committee on Governmental Affairs, Gas Prices: How Are They Really Set? 
(released in conjunction with the Permanent Subcommittee on 
Investigations hearings on April 30 and May 2, 2002).

[15] Moreover, as noted by EIA officials, not all gasoline in inventory 
may be available for use because a minimum level must be left in the 
storage and transportation system, such as in pipelines, at all times 
to keep the system operating.

[16] See, for example, these three citations from the United States 
Senate Permanent Subcommittee on Investigations, Committee on 
Governmental Affairs, Gas Prices: How Are They Really Set? (1) "As EIA 
has pointed out on numerous occasions, very low gasoline stocks, 
combined with a market short on crude oil, generates an environment 
ripe for price volatility, both during the spring and peak summer 
periods." EIA, testimony before the Committee on Energy and Commerce 
(May 15, 2001), 54, fn. 96. (2) "Stocks are the key factor in policy 
responses to market power where supply is inelastic. Every 
investigation of every product spike in the past several years points 
to unusually low stock as a primary driver of price shocks." M. Cooper, 
Consumer Federation of America, Ending the Gasoline Price Spiral (July 
2001), 10-11. (3) "The key determinant of the observed price is the 
amount of inventories held by processors and consumers." P.K. Verleger 
Jr., World Oil Markets: Changing Structure and Greater Price Volatility 
Causing the Third Petro-Recession, draft (April 2001).

[17] Gas Prices: How Are They Really Set?

[18] The state tax data used here do not include applicable sales taxes 
and other fees, which are included in API's November 2004 estimates of 
taxes, presented in Figure 7. API does not currently have such data.

[19] GAO-04-96.

[20] Gasoline prices in California are among the highest in the nation, 
even though most of the gasoline consumed in the state is refined 
there. The high prices are due mainly to complications related to 
supplying California's unique blend of gasoline. For more information 
on the impact of California's special gasoline blend on the state's 
gasoline prices, see, for example, GAO, Motor Fuels: California 
Gasoline Price Behavior, GAO/RCED-00-121 (Washington, D.C.: Apr. 28, 
2000).

[21] GAO/RCED-00-121.

[22] Gas Prices: How Are They Really Set?

[23] Gas Prices: How Are They Really Set?

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