Where Do Our Gas Dollars Go?

That black liquid pumped out of the ground is called crude oil or petroleum. The major oil companies, generally referred to as "big oil," plus some oil-producing nations are the people who do this work. They spend billions searching for and ultimately getting oil out of the ground.

Oil is a commodity. What oil producers can charge for each barrel is set by what's called the world oil market. It's largely supply and demand. But entities such as OPEC (Organization of Petroleum Exporting Countries) can influence the price by either holding back or flooding the market with oil.

The price of a barrel has been around $70 lately. The actual cost to produce it is about $10 to $25. This is why big oil is making big profits. Fifty-four percent of what we pay for each gallon at the pump goes to them.

A barrel of oil contains 42 gallons. It can be made into gasoline, diesel fuel, jet fuel, and many other oils. This takes place at a refinery. We don't have enough in the U.S. to keep up with demand. We're paying for that lack of capacity. Twenty-six percent of what we pay for each gallon of gas goes to the refinery.

After the refinery, our gasoline is put on trucks or in pipes and sent to a storage tank, where it waits to be shipped to our local gas stations. About 3 percent of what we pay for each gallon goes to the people who transport our gas.

The last person to get paid is the station owner. Most gas stations are independently owned. On average they make just 10 cents per gallon. Less than 3 percent of what we pay for each gallon goes to them.

So where does the rest of our money go? Of course the government gets its cut. About 17 percent of what we pay for each gallon of gas is taxes.