HOW ARE GAS PRICES DETERMINED?
- 57% of what consumers pay for a gallon of gas is for crude oil
- 18% for refining
- 12% for distribution and marketing
- 13% for taxes
The current global trading price of crude oil is roughly $74. It can be produced for about $20 globally or $40 in the US. The difference – profits – returns to oil producers.
WHAT CAUSES SPIKES IN GAS PRICES?
- Refinery production
- Local, regional, global impacts
Here are more details of the nuance and the variety of factors that go into determining fuel costs according to the U.S. Energy Information Administration.
According to AAA, Washington’s current spike in gas prices can be attributed to maintenance being done on the Olympic pipeline and restrained supply as a result of the pipeline being temporarily shut down. You can read more about that below:
- New explanation emerges for increase in Washington fuel prices (The Columbian, 6/28/23)
The petroleum industry and organizations funded in part by oil companies such as the Washington Policy Center (pg. 12) are engaged in a coordinated campaign to place the blame of high gas prices entirely on the Climate Commitment Act. In fact, seven of the organizations that must comply with the CCA are listed among the Washington Policy Center’s top donors.
THE FACTS ABOUT THE CCA:
- Around 110 energy plants, oil companies and other industrial facilities are subject to Washington’s cap-and-invest program
- 2023 is the compliance start year for many of these companies
- These companies do not have to prove compliance until November 2024
- These companies have not yet incurred costs as a result of the CCA
LEGISLATION TO WATCH:
Senate Democrats are working to introduce bills during the 2024 Legislative Session to crack down on price gouging and force the largest carbon emitters to be transparent by disclosing their profit margins.
QUOTES FROM SEN. JOE NGUYEN, CHAIR OF THE SENATE ENVIRONMENT, ENERGY & TECHNOLOGY COMMITTEE:
“It is no longer free to pollute in Washington state. Once again, those who are responsible for the damage are unwilling to own up to it. They continue to profit off the harm they are causing while passing along the cost to the consumer. We will not stand for it.”
“Washingtonians have been taken advantage of for too long. It is time for those who have polluted our air and water to bear the cost of the environmental and physical damage they have caused. It is our duty to demand that they pay the debt they owe not only to our planet, but to the people of Washington state.”