Gasoline Price Tracker

Understanding Gasoline Pricing

Gasoline prices in the United States are primarily determined by the cost of crude oil, refining costs, taxes, and distribution margins. The RBOB gasoline futures contract (RB=F) on NYMEX represents the wholesale cost of unfinished gasoline delivered to New York Harbor. It is the most widely referenced benchmark for US gasoline pricing.

The relationship between crude oil and gasoline prices is captured by the “crack spread” — the margin that refiners earn by converting crude oil into refined products. The 3:2:1 crack spread (3 barrels of crude yielding 2 barrels of gasoline and 1 barrel of distillate) is the industry standard measure.

Gasoline prices exhibit strong seasonality. The transition from winter-grade to summer-grade fuel (which has stricter vapor pressure requirements) typically causes prices to rise from February through May. Hurricane season (June–November) can disrupt Gulf Coast refining capacity and spike prices temporarily.

From Barrel to Pump

According to the EIA, the approximate breakdown of the retail gasoline price is: crude oil (50–60%), refining costs and profits (10–18%), federal and state taxes (12–18%), and distribution and marketing (6–12%). These percentages vary by region and over time.

Federal excise tax on gasoline is $0.184 per gallon, while state taxes vary widely — from about $0.09/gallon in Alaska to over $0.65/gallon in California (including cap-and-trade costs). These taxes account for a significant portion of the difference in pump prices across states.