Where the money goes when you buy a gallon of gas

An overview of the problems electric cars pose for funding road maintenance includes a breakdown of where the money for each gallon of gas goes:

About half goes to the drillers that extract oil from the earth. Just under a quarter pays the refineries to turn crude into gasoline. And around 6 percent goes to distributors.

The rest, or typically about 20 percent of every gallon of gas, goes to various governments to maintain and enhance the U.S. transportation’s infrastructure.

Currently, the federal government charges 18.4 cents per gallon of gasoline, which provides 85 percent to 90 percent of the Highway Trust Fund that finances most on highways and .

State and local government charge their own taxes that vary widely. Combined with the national levy, fuel taxes range from over 70 cents per gallon in high-tax states like California and Pennsylvania to just over 30 cents in states like Alaska and Arizona. The difference is a key reason the price of gasoline changes so dramatically when you cross state lines.

I would guess few drivers have a sense of where money at the gas station goes. Instead, they likely just react to increases or decreases in prices and when prices go up possibly grumble about who is being made rich.

One thought on “Where the money goes when you buy a gallon of gas

  1. Pingback: Viewing city-to-city trains as public goods and not profit generators | Legally Sociable

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