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What Do You Really Pay for at the Pump?Aired June 21, 2000 - 2:03 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NATALIE ALLEN, CNN ANCHOR: A significant portion of what you pay for gasoline is in state and federal taxes. Well, the governor of Indiana has suspended his state's gasoline tax for two months, which should bring prices down at least seven cents a gallon.
For more on what you really pay for at the pump, here's Steve Jankowski (ph) of affiliate KSDK in Hartford, Illinois.
STEVE JANKOWSKI, KSDK REPORTER (voice-over): The image is all too familiar: numbers racing as the reformulated fuel fills your tank. The Metro East and Chicago areas have been especially hard hit. But the oil industry says it has been too by a combination of factors, including pipeline failures, a multitude of products to deliver on government demand, and not having enough product in the right place at the right time.
As much as 750,000 gallons a day leaves the Hartford Wood River Terminal, but the fuel doesn't arrive that quickly. Operators stress the trip on coastal-based pipelines can take as long as 14 days, and anything that disrupts that flow impacts the price. And that they say is something which has happened on several lines this spring at the worst possible time.
But the federal government wants to know if something purposeful is being done to drive up the price. Right now, refiners are paying about 79 cents a gallon for crude oil, three cents a gallon to move it through a pipeline, 12 cents a gallon to refine it, and two cents a gallon to transport it to a retailer.
A retailer can pay as much $1.20 a gallon, and then add a 12 to 13 cent a gallon profit margin. And of course, there's the average 45 to 50 cent a gallon in federal and local taxes. That puts the price between $1.77 and $1.83 a gallon. Refiners, in the process, could be making more than 20 cents a gallon profit.
Steve Jankowski, News Channel Five.
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