published Saturday, August 11th, 2012

Gas taxes add up for drivers

In Chattanooga, regular unleaded gas costs an average of $3.35 per gallon, according to the website That means it costs more than $50 to fill a typical car's 15-gallon tank.

This summer, high gas prices seem to be a bigger drain on your wallet each time you fill up.

But why does gas cost so much?

It's easy blame high gas prices on rich oil company executives or greedy gas station owners. But that's just not accurate. In truth, governments rake in a larger profit than anyone at the pump.

The price of a gallon of gas is based on the combined cost of four different expenses: the price of crude oil, the cost of refining gas, distribution and marketing expenses, and the amount of taxes levied on gasoline.

Oil costs comprise about 76 percent of the cost of gasoline, according to U.S. Energy Information Administration (EIA). That means $2.66 of a $3.50 gallon of gasoline is set before the oil is even refined and turned into gas.

Global markets, reacting to supply and demand, determine the cost of crude oil. Just like any commodity, from gold to corn, a shortage in supply or an increase in demand leads to a rise in prices.

Refining oil to manufacture gas is the next step in the process -- and the next expense for drivers. During the refining process, gasoline is extracted from crude oil, and additives, including lubricants and detergents to reduce engine deposits, are added. As of January 2012, the EIA found that the refining process was responsible for six percent of the cost of gas.

Distribution and marketing — the part of the process most apparent to consumers — constitutes another six percent of gas prices. That portion of the cost includes the shipping and transportation of the gasoline, a markup to cover retailers' expenses, and any advertising done to appeal to customers.

The remaining 12 percent — or almost 50 cents per gallon — goes directly to federal, state and even local governments in an array of sales and excise taxes.

The federal gas tax is 18.4 cents on every gallon of gasoline sold in America. State gas tax rates vary from a low of 8 cents per gallon in Alaska to a jarring 49 cents per gallon in New York.

In Tennessee, state taxes increase the cost of gasoline by 21.4 cents per gallon. State gas tax rates are 16 cents per gallon in Alabama. Georgia's convoluted gas tax structure works out to roughly 29.4 cents per gallon.

Fortunately for already highly taxed Peach State motorists, Gov. Nathan Deal signed an executive order in June that prevented a scheduled .8 cent gas tax increase.

Believe it or not, government makes far more from gas sales than all of the oil companies put together.

ExxonMobil for example, made only seven cents per gallon of gasoline in 2011. That's just a drop in the bucket compared to the nearly 40 cents in taxes that Tennesseans pay on a gallon of gas.

Gas taxes are particularly unfair because they hit the poorest people the hardest. Most people have to drive, whether to work, to the grocery store, to pick up kids from school or any of the dozens of other reasons we pull out of the driveway each day.

These responsibilities don't change whether you make $25,000 or $250,000 each year. The only difference is for someone struggling to make ends meet, paying 50 cents per gallon in taxes, may be the difference between driving to work and putting dinner on the table.

The next time you begin to blame oil companies, speculators or service stations for high gas prices, remember, no one get richer off of gasoline than government.

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nucanuck said...

If we each committed to driving 20% fewer miles, we would lower our costs, reduce traffic flows by 20%, bring down the price of gas, and lower climate changing emissions into our atmosphere.

We could all be conservative in the true sense of the word.

We can change our world if only we would.

August 11, 2012 at 12:42 a.m.
conservative said...

Hey nucanuck, how many earths are you consuming this week? You stated that you were consuming 2.3 earths just recently, any changes?

August 11, 2012 at 8:32 a.m.

Profit? On gas taxes? That would require revenues from gas taxes to exceed the spending to which those same taxes are allocated.

Which is to those very same roads. Are you so blindly declaring that to be the case that you won't even bother to support your implicit claim? Because the statistics don't bear up, it's about a fifty percent coverage actually. That means the government is pulling the money from elsewhere, not profiting as you allege.

And of course you left out how you want the things the gas tax pays for to be paid for in the alternative. Instead, you'd rather feign concern for the poor.

Or do you think they can do better without well maintained roads?

Heck, you probably think the government keeps the money, as opposed to paying it out to private road construction companies.

Your insights are vapid, distorted and shallow as always. You know if you want to be a good advocate, you wouldn't produce such a facile analysis that's so easily disputed.

August 11, 2012 at 9:51 a.m.
nucanuck said...

c-man, my family has been working for almost a decade to keep our consumption trending downward. Consuming our equivalent of 2.3 earths worth of resourses is nothing to be proud of, but it is about half the US average. We are making progress, are you?

Personal responsibility is not liberal or's a prerequisite for a sustainable society.

August 11, 2012 at 11:53 a.m.
conservative said...

nucanuck, consuming 2.3 earths of resources doesn't sound responsible to me. You must be the number 1 planet criminal of all time!

August 11, 2012 at 6:19 p.m.
nucanuck said...

c-man, 2.3 is an unsustainable number...undefendable. We have our work cut out for us and we will continue to reduce it.

The American average is close to 5. Are you the average American? Worse? Better? Do you have the guts to check it out and own up to YOUR number? No, of course you won't.

August 11, 2012 at 8:45 p.m.
328Kwebsite said...

The paper is running a story today claiming that "software glitches" are stopping the distribution of those rental bicycles. I know I saw at least 20 people using those same bikes today.

When is the Free Press going to dispatch a reporter to actually observe the bike stations? Can they burn enough butt flab to walk over there and try to use one of those things? The story they are publishing about fake, undescribed problems seems observably false.

August 11, 2012 at 8:55 p.m.
conservative said...

nucanuck,You better believe I won't. Some people are easily fooled, I like to call them sheep (sheep are dumb)and will follow bad shepherds.

There will always be Godless fools trying to deceive those who have rejected the one and only true God. It is truly a sad thing.

The notion that I may be consuming several earths is unbelievable stupid!!!

August 12, 2012 at 8:44 a.m.
Easy123 said...


You are willfully ignorant and proud of it.

August 12, 2012 at 1:13 p.m.
conservative said...

easy said....

"We have utterly destroyed the planet.", "It's not just my position. It's reality"

Are you still sticking to this story and is this story your reality?

August 12, 2012 at 2 p.m.
Easy123 said...


"Are you still sticking to this story and is this story your reality?"

Are you still recycling this line? I notice you don't add the links I provided. Again, you are so willfully ignorant that you can't even support your own position with factual evidence. I have supported my position. I have provided fact upon fact with links and charts to boot. All you have done is quote me. Your argument isn't just lacking, it's nonexistent. I dare you to support your position.

Would you like to finally attempt a coherent rebuttal or just continue to wallow in your ignorance and complete ineptness?

August 12, 2012 at 3:34 p.m.
conservative said...

easy said....

"We have utterly destroyed the planet.", "It's not just my position. It's reality"

Look around you. What do you see?

August 12, 2012 at 4:58 p.m.
Easy123 said...


"Look around you. What do you see?"

Again, would you like to finally attempt a coherent rebuttal or just continue to wallow in your ignorance and complete ineptness?

August 12, 2012 at 6:11 p.m.
conservative said...

Could you possibly have a rational conversation with someone who wrote this :

easy :

"We have utterly destroyed the planet.", "It's not just my position. It's reality"

August 13, 2012 at 1:40 p.m.
Easy123 said...


Still trying? Are you really that much of a coward? Why can't you refute what I say? Why can't you support your own position?

Are you a coward or just inept?

August 13, 2012 at 1:56 p.m.
J3rrYcid said...

Well, nobody said it would be cheap to own a car. Yes, it provides convenience and it saves time and effort while travelling to anywhere. However, it does not run on water and fuel is a depleting resource which would most certainly require a lot of costs to continue extracting. I personally have not been blaming the oil companies or the petrol kiosk owner because I have always known the hefty prices are due to the taxes incurred on the already-expensive oil prices. It is like a form of administration fee for getting the oil right to your doorstep. So, if you are not willing to pay up, then succumb to going public.

January 14, 2013 at 4 a.m.
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