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Consumers Grin and Bear Rising Gas Prices

According to a new report by the Energy Information Administration (EIA), gas prices across the United States averaged $3.93 in February 2012. Petroleum analyst, Patrick Dehaan, explains that multiple factors contributed to the price:

“Certainly the price of crude oil is a big influence on the price of gasoline but as we approach summer we also see that refineries and their status of production certainly impact gas prices, as well as geopolitical issues, similar to that of what we have seen in Iran certainly can make an impact as well.”

Regarding the $3.93 average in particular, the EIA gives the following makeup of the price:

  • 72% crude oil prices
  • 12% refinery costs
  • 11% tax
  • 5% distribution and marketing

All such factors are largely out of the reach of consumers’ influence, so the main recourse for reducing gas costs remains the purchase of cars sporting better mileage, says Jim Bianco, President of Bianco Research:

“Gas mileage is their number one concern when buying a car. You see them picking the highest mileage option of all of the engines so yeah over the longer term, say in the next couple of years that change is going to have a big impact on the price of gasoline.”