The retail price of gasoline is affected by a variety of factors, including the supply and price of crude oil, refinery operations, transportation, retail overhead and taxes. The worldwide price of crude oil, which is the raw material for making gasoline, is determined by supply and demand and is often affected by world events. Crude prices are affected by a large number of factors including growth in world demand, OPEC actions, political uncertainties, etc. Timing and availability of imports from outside the U.S. can affect the supply/demand balance as well as unforeseen operating problems within the refining and distribution system, particularly during periods of major refinery maintenance. A $1 per barrel increase in crude generally translates to a two to three cent per gallon increase in the price of gasoline. (The price of crude affects all states fairly evenly.)


The second major contributor to the price of gasoline is the amount of tax that is paid. In West Virginia our state tax is now 33.4 cents per gallon. Furthermore, federal tax is an additional 18.4 cents per gallon. In West Virginia every time you fill up you pay 51.8 cents tax on every gallon. That is a lot of tax! In WV we pay 1.7 cents per gallon more in tax on each gallon of gas than the national average.

West Virginia has only one very small refinery in the state, located in Newell, WV. It is operated by Ergon and has a limited capacity. Again, with the exception of one state, Maryland, our surrounding states have a huge advantage over us.

West Virginia has approximately 1450 retail locations that sell gasoline. The average station sells approximately 48,517 gallons per month. Typically, when a station sells fewer gallons they charge more for it to allow them to cover the fixed costs (payroll, facilities, and insurance) for their business. Stations with large volumes can often sell their products for less.

Due to our limited distribution system — no pipelines and limited terminals, our state has less inventory than others. Much of our fuel comes from out of state. Bringing fuel from out of state increases trucking costs.


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