Crude oil futures may be virtually flat today, but you wouldn’t know that if find yourself at the wrong gas station in the northeast. There you might find that gas prices have recently risen to more than double the national average, topping $8 per gallon. Why would gas prices double if crude is going nowhere? Via ABC News:
More than 50 Lukoil gas stations in New Jersey and Pennsylvania were jacking up prices to more than $8 a gallon Wednesday to protest what they say are unfair pricing practices by Lukoil North America that they say leave them at a competitive disadvantage.
Sal Risalvato of the New Jersey Gasoline, Convenience, Automotive Association said the protest was aimed at raising consumer awareness about the challenges facing Lukoil dealers and to get Lukoil to respond to dealer grievances.
He said Lukoil engages in various practices that force franchisees to pay higher prices for their fuel than competitors. It is not uncommon for Lukoil dealers to see a competitor selling gas to the public for considerably less than what they’re paying Lukoil for their latest delivery, he said.
Obviously this is not a normal situation, but it’s a good reminder that the prices you see at the pump don’t necessarily reflect the price of oil. In fact, according to the US Energy Information Administration in 2010 the cost of crude only contributed about 68% of the cost of gas, with the rest made up of refining costs and profits, distribution and marketing costs, and taxes. They also have a nice infographic that breaks down how that ratio has shifted in recent years:
This is something that we Chicagoans are well acquainted with. In our backyard, gas is consistently higher than in most of the rest of the country – and much of that is due to higher taxes and regulations requiring more expensive additives (although increased transportation costs also play a part).
All this to say, it may be tempting to complain about the cost of filling up your tank, but it could be much worse – you could be at a Lukoil station… or worse, in Europe.

