The national average price for a gallon of regular gasoline in the U.S. hit an all-time high at $5.014 on Monday, according to AAA.
There are several factors behind why a gallon of gas can go over $5 a gallon. Here's what we know about gas prices and how they are determined:
Four factors make up the cost of a gallon of gas:
· The cost of crude oil.
· The cost of refining the crude oil.
· Distributing and marketing the oil.
· Federal and state taxes that are applied to each gallon of gas sold.
The cost of crude oil accounts for at least half of the price per gallon.
According to the American Petroleum Institute, "U.S crude oil prices are determined by global fundamentals, including supply and demand, inventories, seasonality, financial market considerations and expectations."
The cost to refine gasoline varies between 40 cents and 70 cents per gallon, depending on various factors.
The cost to transport the refined oil to service stations runs about 27 cents per gallon.
Taxes vary by state. In addition to the basic state tax, additional taxes and fees such as sales taxes, gross receipts taxes, oil inspection fees, county and local taxes, underground storage tank fees and other miscellaneous environmental fees can be added to the cost of a gallon of gas.
The federal gas tax is the same for every state — 18.4 cents — an 18.3% tax plus a 0.1 cent charge for leaking underground storage tank fees.
Below is a chart that shows the gas tax for each state as of Jan. 1, 2022.
