Crude Oil - the monthly average of the composite refiner acquisition cost, which is the average price of crude oil purchased by refiners.Refining Costs and Profits - the difference between the monthly average of the spot price of gasoline or diesel fuel (used as a proxy for the value of gasoline or diesel fuel as it exits the refinery) and the average price of crude oil purchased by refiners (the crude oil component).
Distribution and Marketing Costs and Profits - the difference between the average retail price of gasoline or diesel fuel as computed from EIA's weekly survey and the sum of the other 3 components.
Taxes - a monthly national average of federal and state taxes applied to gasoline or diesel fuel.
Then the graphic:
And, if you were to really reduce the corporate income tax paid by all the entities involved in getting the gas to the pump (about 35%), you could see a further drop in gas prices.
And, if you could increase the amount of crude available, the price would drop - so, you could increase drilling, add a pipeline to Canada, etc. then the crude oil component would drop in price.
Or, you could curse the oil companies and demand hearings into their "obscene" profits or argue that the price is still too low and that a higher price at the pump would force Americans to conserve, switch to alternatives and become like Europe. High speed trains to nowhere for everyone!
Finally, there are graphs that show the price of gas adjusted for inflation. See here. I note that the price information is not adjusted for tax increases on the gas. That would be an interesting chart.
Real price: A price that has been adjusted to remove the effect of changes in the purchasing power of the dollar. Real prices, which are expressed in constant dollars, usually reflect buying power relative to a base year.
Nominal price: The price paid for a product or service at the time of the transaction. Nominal prices are those that have not been adjusted to remove the effect of changes in the purchasing power of the dollar; they reflect buying power in the year in which the transaction occurred.
Info on the EIA chart :
Real Petroleum Prices are computed by dividing the nominal price in a given month by the ratio of the Consumer Price Index (CPI) in that month to the CPI in some "base" period. The Real Petroleum Prices spreadsheet and charts are updated every month so that the current month is the base period in the monthly price series. Consequently, all real prices are expressed in "current" dollars and any current month price may be compared directly with any past or projected real prices.What is shown, as I understand it, is that for years the price of gasoline at the pump was less than that that would have been expected due to inflation. In recent months, the price has caught up with inflation. For example, the nominal price of gas in the 1980 period was $1.20 per gallon. The inflation adjusted "real price" was $3.40 in today's dollars. The current "real price" is $3.60 and the actual ("nominal") prices is about the same. In short, the price of gas at the pump today is almost the same as the effective per gallon price was in the 1980's. Further, for all that period between 1980 something and 2009, the effective price at the pump of gasoline was below the rate of inflation - gasoline costs were a decreasing part of your budget.
Hmm. What could have happened in 2009?
Feel free to correct me in the comments if my understanding is incorrect.