Real price of Gas:

[jrittenhouse]

Back when I was young - we’ll say when I was 10, 1967 - gasoline generally cost about $0.32 per gallon.  Gas Wars would occasionally come up where there’d be a thrash over what sort of extras (glasses with a fill-up, etc.) would pull the business in - and sometimes, it was brute-force-drop-the-price.  I can remember seeing an occasional drop to say

Comments

[interactiveleaf]

"The rest of it" depends on who you ask.

Compare: The scam behind the rise in oil, food prices

Speculation on the futures market, rather than supply and demand, is driving up costs, analysts say.

And Contrast: Are Speculators Gouging Us At The Pump?

There is no need to repair to conspiracy to answer the question about why gasoline prices are going up. The loss of Libyan crude--about 2% of global supply--has reduced the amount of oil available in the market and gasoline prices track global crude oil prices. Prices must necessarily rise to reduce global oil consumption because we can't consume what isn't there. How much do prices need to rise to reduce oil consumption by 2%? It takes a big increase in gasoline prices to get us to drive even a little less. Economists estimate that prices must rise anywhere from 10 to 20 times the percentage reduction in quantity to reduce demand enough to equal the lower supply. Thus for a 2% supply reduction, prices must rise between 20% and 40%. Average gasoline prices have risen 20% since early

[johnridley]

At least a dollar, probably more, is due to speculation. That means that > 25% of all gas sales in the US are facilitating nothing more than the transfer of dollars from everybody involved in the economy in any way straight into the pockets of market speculators.

[kalimac]

Part is taxes, part is the increased cost of production (covering a lot of things), and part is, as you note, speculation. The recent bump up to $4.50 from a base in the $3.50-$4 range seems to have been entirely speculation.

Worth noting, of course, is that 1967 32 cents = approx. $2.15 today. Not long ago, $2.15 was an ordinary gas price here, but it was awfully hard to convince people that it was no more expensive in actual pain-in-the-pocket than it had been forty years earlier.

[wcg]

I remember selling gas for 19.9 cents per gallon at my dad's station in Tucson in 1969. That was during a gas war.

As for current costs, as others have already noted a lot of the cost is driven by speculation. If we go back to 2008 before the world economy took a nose dive off Mt. Everest, a fair amount of what was driving the price *then* was overall demand for diesel fuel. Depending on how you refine a barrel of oil, you can make more or less of it into diesel. When there's a high demand for diesel fuel, that leaves less for making gasoline. Diesel was in great demand in India and China, where lots and lots and lots of industries use diesel fuel to power generators and to move freight around. As the world economy recovers that will eventually happen again.

[astro_not1]

Another factor to keep in mind is that (despite the fact that some will say I'm dead wrong) back in the late 1960's the stations got 2 to 5 cents per gallon as their share. There are those who insist that is still the case (especially some of the station operators, who want us to feel sorry for them), but that is highly unlikely given that if that were the case there would be no independent stations at all because even with the exhorbitant prices they charge for everything else they sell they would not be able to stay in business