660Ampitt

The price of gas continues to climb, and with continued uncertainty in the Middle East, they will probably continue to do so. In California and elsewhere, prices for some grades of gas have long passed the previously unthinkable threshold of three pounds a gallon. Granted, that is lower than the inflation-adjusted prices of early 1981, but that doesn’t make anyone feel better when they’ve just paid nearly 100 to fill the tank of their sport utility vehicle.

In a previous article, we offered some solutions as to how the average consumer can either save on gas prices or use less gas. These tips included using credit cards with cashback rebates, keeping your car tuned and tires inflated, and keeping the car washed and waxed, which reduces drag. Here are a few additional tips which will help ease the strain of filling your tank.

Empty your trunk. Some people drive around with their trunks nearly full with things that just don’t need to be there. Sure, you need a jack and a spare, but do you really need a toolbox, golf clubs, and that pile of old clothes you’ve been meaning to drop off at the Salvation Army? Any extra weight you carry requires additional energy to make your car or SUV move. Lighten the load and your engine won’t work as hard or use as much fuel.

Drive efficiently. That means accelerating gradually, rather than speeding out of an intersection. Your car uses fuel more effectively when you gradually accelerate. Once you achieve your desired speed, keep it steady, using cruise control if you have it. Speeding up and slowing down only uses more gas.

Take mass transit. No, it isn’t sexy to take the bus to work, but it can save a lot of money if your commute is more than five miles or so. If you can’t take mass transit, you might consider a carpool.

Shift appropriately if you’re driving a car with a manual transmission. Shift at the factory recommended shift points, rather than running your tachometer all the way up before shifting. Your car runs best within a fairly narrow RPM range.

Each of these tips offers a small saving in fuel consumption. When combined with others, they add up and can produce significant savings. If you can increase your fuel consumption by just two miles per gallon, you can save 30-40 on a 1000-mile trip in your SUV. When you’re paying 3.09 per gallon, every penny counts.

With extremely high gas prices straining consumers pockets in recent months, it is only natural for people to wonder where all the money they pay at the pump goes. Contrary to popular belief, the price of gas is not solely reliant on the price of crude oil. There are many parties involved in setting the price of the gas you purchase at the pump, and below is a quick run-through on who they are and what portion of the entire price they require.

-Crude oil: Crude oil suppliers require the largest share of the pie at about 45%. This share is determined by the oil-exporting nations and the Organization of the Petroleum Exporting Countries (OPEC) in particular. The price of one barrel of crude oil depends on how much crude oil these oil-exporting countries produce. Sometimes gas prices rise despite the fact that there is enough crude oil to go around, and this is because of a variety of other factors, one of which is the quality of oil. Oil can be heavy or light, and sweet or sour. These words only describe the quality, not the taste, of oil. For example, light, sweet crude oil is cheaper and easier to refine, but quantities of this kind of oil have been running lower recently. However, there is still a lot of heavy, sour oil, which means that refineries must spend more money refining it.

-Taxes: Federal and local taxes take about 31% of the price you pay at the pump. Federal excise taxes account for about 18 cents per gallon, while state excise taxes require about 20 cents per gallon. There might also be some additional state sales taxes, along with local and city taxes.

-Refining costs: Refining crude oil makes up approximately 13% of the price you pay at the gas pump.

-Distribution and marketing: The costs of transporting and marketing gas make up about 13% of the price of gas. Crude oil must be transported from oil-producing countries to refineries, then the gasoline must be transported to distribution points, and then lastly to the gas stations that fill your tank. All of the costs of this shipping and transportation are transferred to you, the end consumer. Along with all this comes the marketing that is involved in increasing a brands awareness and appeal, and these costs are also passed on to the consumer.

-Gas station markups: There is no set percentage for this number. Gas stations are at their own discretion as to how much to add on to the price in order to actually make a profit on the gas that they sell. Some stations (usually the larger ones) will only tack on a couple cents, while others will add a dime or even more. Some states have laws that prevent stations from adding on less than a specified percentage over the price that the wholesaler sets. These markups are also dependent on the area where the station is located. Demographic information such as median income and population affect the decisions that stations make concerning the exact price they set for the gasoline that they sell from their pumps.