WHY ARE WE PAYING MORE FOR GAS NOW THAN WHEN OIL WAS THE SAME UNDER BIDEN?
It's complicated. Luckily you have me to explain it to you!
How are we paying more at the pump today than we did under Biden, when a barrel of oil costs about the same?
Because the oil is only part of what you're buying. And the other part quietly blew up.
Here's the whole thing in plain English.
A barrel of oil makes 42 gallons. Right now oil runs about $93 a barrel, so the actual crude in your gallon is only around $2.20. The rest of what you pay, another two bucks and change, is everything else. Refining it. Trucking it. Taxes. And the station's cut.
Back in 2022, Biden's expensive-oil year, a barrel cost about the same, right around $95. But gas averaged $3.95 a gallon. Today, at the same oil price, we're paying $4.49. That's about 54 cents more for the exact same barrel.
So where did that extra 54 cents go? Almost none of it is the oil.
About 26 cents is plain old inflation. Everything it takes to make and move gas costs more now, the workers, the trucks, the power to run a refinery. Four years of rising prices baked into every gallon.
About 15 cents is refineries, or the lack of them. We've shut a bunch down and built almost none, so the ones still standing charge more to turn crude into gas. Less competition, bigger markup.
A few cents is state gas taxes creeping up.
And maybe a dime is fatter margins, the part where you can argue somebody along the way is padding the bill.
Now the honest part, because I'm not going to lie to you. Today's oil is pricey on its own too, close to $100, partly the war premium from the Iran fight. So today's sticker is expensive crude plus four years of inflation stacked on top.
But here's what should tick you off. Even when oil calms back down, that 54 cents isn't coming out of your tank. Inflation doesn't reverse, and the refineries aren't coming back. That part is permanent.
That's the hidden tax nobody voted for, and it's riding in your gas tank every single day!