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Federal gas tax holiday of 18.4 cents gives us 0.04 Gallons of free gas i.e 0.8 miles free

McCain and Hillary Clinton are proposing federal gas tax holiday break this summer which means MINUS 18.4 cents of gallon gas price with no federal tax.

If the proposal is approved ….doing the math — my car which gives 20 miles per gallon and $4.47 is the gas price for today (June 2’2008) in Chicago, IL === 0.04 Gallons of free gas i.e 0.8 miles free.

Hope they pass this law soon.

I always wondered what components make up a gallon of gas price – Here is the answer for $4.47 (premium unleaded) a gallon of gas for today consists of

3.26 = crude Oil
0.49 = taxes
0.26 = Distribution and Marketing
9.44 = Refining

I didn’t come up with these numbers, CNN gave the % allocations here

If states allow state tax exemptions that would bring the gas price to $4.00.


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Posted By: Kalyan | Date: June 3, 2008 | Categories: Uncategorized
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0 Responses to Federal gas tax holiday of 18.4 cents gives us 0.04 Gallons of free gas i.e 0.8 miles free

  1. Bill says:

    According to the CNN pie chart, there is 0% left for profit. Some how I doubt that!

  2. Kalyan says:

    You are right I guess they don’t take into account the profits of biggies like Mobil & Exxon when their profit is more than doubled i.e more than 100%.

    Every time I go to gas station these days I feel a shoot up in my blood pressure. Close to 60 or 70 cents in just few months is outright ridiculous.

  3. Jeagan1999 says:

    Suspending the gas tax is only a short term fix to high gas prices. the only long term fix is to increase production. We need to start tapping our own resources in this country by drilling in the ANWR and Gulf of Mexico.
    OPEC will keep production down in order to keep prices high. This is an economic drain on our economy and a national security issue, as it leaves us vulnerable to the whims of oil producing nations, some of which, are unfriendly to our country.
    By using our own resources in ANWR and the Gulf, we can ween ourselves off foreign oil, create hundreds of thousands of new jobs here at home, and create billions of new dollars in revenues for the Federal and State governments. This will also give us time to develop the new technologies (battery power, hydrogen power, etc..)that will allow us to kick the oil habit for good.
    I don’t see either McCain or Obama having the guts to do this…. which means we are destined to keep paying ever higher gas prices until a leader with the guts to say this comes forward.

  4. Kalyan says:

    @Jeagan1999 — I feel rising gas prices to some extent is good for us as US will take measures that will have long lasting impact to reduce demand of Oil as it did in 1970s Oil shock. In 1970 when Arab nations imposed embargo on the US, US did two excellent things that kept oil prices at low for next 25 years (i.e. from 1973 to 2008 ) — 1) Alaska oil pipeline built to increase oil supplies.
    2) To reduce demand created standard to increase gas mileages for automobiles.
    Though there is no embargo now the Hybrid cars are promoted and I feel to increase energy supplies it should tap new internal resources one more time. What Nixon did last time should be repeated by Bush or the presidential candidates. Its sad to see no concrete agenda on gas prices for these two Candidates.

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