One barrel of crude oil, pulled straight from the ground, contains 42 gallons. Although it will burn just as it is, and there are examples of Texas and Oklahoma families in the 1950s digging their own personal oil well and attaching their heating system directly to it (In Cold Blood by Truman Capote mentions this technique, among other sources), crude oil performs much better for specific applications if purified and separated into certain component parts, a process called refining.
Refining a barrel of oil creates approximately 19 gallons of gasoline (petrol), roughly 45% of the total. Another 29% becomes diesel fuel or heating oil (called distillates, 13 gallons), 9% jet fuel (4 gallons), 4.4% propane and other liquefied petroleum gases (LPGs, 2 gallons), 1.9% asphalt (less than a gallon), and 15.5% other products (7 gallons), which includes petrochemical feedstock for the manufacture of rubber and plastics, as well as consumer products such as ink, bubblegum (put that in your mouth and chew it), crayons (ditto for kids), deodorant, and heart valves. As the EIA states in a footnote, the percentages add up to more than 100% because there’s a gain in the refining process, presumably from the volume of additives. A 42-gallon barrel returns about 45 gallons of refined products.
One of the factors that determines the cost of a barrel of oil — a specific barrel of oil, not a generic one — is its chemical composition. This determines how much it will cost to refine and it's caused by the geography of the region where that barrel originated. For example, West Texas Intermediate (WTI) oil is a lightweight crude that contains little sulfur (called sweet crude) and which is easy and cheap to refine. So is Brent crude from the North Sea, although it’s not quite as light or sweet and therefore costs a little more to separate out the sulfur and turn it into petrol. Both of these are among the more expensive oils of the 195 benchmark varieties in the world, with WTI generally (but not always) costing a hair less than Brent.
On the other hand, around 52% of Mexico’s crude is a heavy oil with a high sulfur content, called a sour crude. This makes it more difficult and expensive to refine, and therefore it brings a lower price than WTI or Brent. Also, more and more of the crude oil being pumped from the Middle East is heavy sour crude, and Dubai in 2006 initiated a crude oil commodity exchange similar to NYMEX, intended to market this oil to refineries in Asia, which are better equipped to refine it. See, not every refinery can refine every type of oil, and although some refineries can shift their production for various types, it costs money to do so, further raising the cost of the finished products.
In the United States, federal gasoline tax is 18.4 cents per gallon. Each state also charges a gas tax. The average is 24.12 cents per gallon, with the lowest being Alaska and Georgia at 8.0 cents per gallon and the highest being California at 37.56, followed by Washington state at 37.51. My own Texas is in the middle of the pack at 20 cents per gallon. On average, around 23.6% of your pain at the pump, at $1.80 per gallon (my local price, and that’s expensive), goes to governments at one level or another.
(Current state-by-state fuel tax spreadsheet is available here.)
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