To understand what you pay for at the pump, first you should know where gas comes from. Gasoline is made from crude oil – the black oil that shoots up from the ground. Somebody’s got to collect it all and then refine it into a usable form. From there, it’s shipped all over the world to companies who market and distribute it to stations across their respective countries (think Shell, Texico, Chevron, etc.). Lastly, your local, state, and federal governments add taxes onto the cost of each gallon. From there, gas stations are happy to accept your money in cash, debit, or credit.

While your money goes directly to the gas station, it is really paying for all of these production stages. In total, you pay for the discovery, extraction, and shipment of crude oil; the refinement of oil into gasoline; the shipping, distribution, and marketing of gas by oil companies; the costs of running a gas station; and the taxes levied by the government. Simply put, you’re paying for it all!

Tags: costs, gas, Oil, production