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Where Do Your Gas Dollars Go?

By Jen Alic | Thu, 14 February 2013 20:38 | 4

Americans pay more for gas than they do for vehicles on average, and the Union of Concerned Scientists has set out to demonstrate exactly where all the money goes.

In a recent study, the UCS claims that “your gas money doesn’t support your local gas station, nor does it benefit you financially, even if you own oil company stock. Most of the money you spend at the pump goes directly to one place: oil companies.”

The UCS breaks it down like this. Of the over $22,000 spent on gas over the lifetime of an average vehicle purchased in 2011 … 

•    oil companies earn about $15,000
•    14% goes to taxes used for roads and public transportation
•    10% goes to refining costs
•    8% goes to distribution and marketing
•    Gas stations aren’t your enemy—they earn only about 3-5 cents on each gallon sold (it’s the snacks they profit from)

Ok, so what does this mean for those who own shares in oil companies? Not much, according to the UCS. The argument is that “even if you had $1 million invested [in a company like ExxonMobil], you would still get less than one cent in return after spending almost $2,000 on gasoline.”

So what’s the point of the UCS report? There’s always an agenda, which in this case is to campaign for fuel-efficient vehicles. After taking the hit on the upfront cost of a hybrid vehicle, you can save thousands in gas costs over the life of the vehicle.

“You have a choice when it comes to your oil use: Continue pumping your money into oil company profits or invest in fuel efficiency and keep the profits in your pocket instead,” the report suggests.

A Ford Fusion SE Hybrid, for instance, costs on average $3,500 more to purchase, but the UCS says the savings in gas would be almost $9,000.

The UCS is sponsoring the “Half the Oil Plan”, which seeks to cut Americans projected us of oil in half in 20 years. Will it work? Well, there has hardly been a better time to pray on the public’s pocketbook sentiment when it comes to gas.

One would assume that as gas prices rise, sales of fuel-efficient vehicles will increase. Over the past five years, there has been a direct correlation between rising gas prices and declining sales of larger vehicles, as consumers opt for smaller cars that burn less gas.

With a $1 rise in fuel prices, pick-up trucks have typically lost about 0.5% in market share, while small cars gained about 0.7% in market share. However, hybrids haven’t benefitted much at all. For the same $1 rise in fuel prices, hybrid cars have gained only 0.2% in market share. Hybrid trucks have actually lost market share for the same rise in fuel prices, according to data from Experian.

By. Jen Alic of Oilprice.com

About the author

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Jen Alic
Company: ISA Intel

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  • Joe Shrimp on February 15 2013 said:
    The statement that buying gas does not benifit you financially is false. Energy is a substitue for labor. If I buy fuel to power my truck I don't have to hire a bunch of people to deliver my stuff. If I buy fuel to power my car I don't have to pedal my bicycle to work and I get there in less time, thereby increasing my earning potential each day. If there was no financial benifit people would not spend the money.
  • Judy on February 16 2013 said:
    If you had $1 million of Exxon stock at purchased at todays price, you would receive $25,803 in annual dividends.
    $2000. would buy you 22.6 shares and you would receive $51.53 in divys
  • Mina Teal on February 16 2013 said:
    Last Month,30 days ago today, I paid $2.99 9/10 for regular at the local Walmart. Today I paid 3.54 9/10 for the same grade out of the same pump! That is $.55 cents a gallon more. The price of oil is going down ever day. There so much at the oil temial at Cushing Oklahoma where all our oil from this part of the world goes to that they had to shut some pipe lines down. I have heard that some of the oil refiners down on the gulf were shipping their gas over seas where they could make more money. Does this say much for the money hungry people that have control of our marking for our oil and the people who have control of our goverment.

    Dear People I can assure you that we will have the last laught over all these people that control our oil market and the people in our goverment?

    What will happen? Our food is going up so fast, Our present's new taxes are kicking in and every thing is going sky high. WEll dear people is by the time we buy a little food, pay our taxes WE The American people Won,t be able to afford any gas. Only the gas we need to get to work with. There will be so many men, women and children out of work so it won't make any differents any way!

    I hope ther will come a time when All our big oil compines and the people who make millions of dollars off us working people can't sell their and gasoline so maby they will have to drink it. If they do they will lots of gas on their stomach

    I think I speak for millions of middle class, Lower class Amercian that will be trying to keep food on our table,paying taxes and paying for the medical services that we can't afford.
  • Skeptic on February 18 2013 said:
    The author neglects to detail the fractions of the $15,000 that goes to the Oil company that are the costs of getting the oil out of the ground. Sure refining and marketing and taxes are part of the equation...but exploration and drilling and transportation are substantial as well...

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