LIVE VIDEO: NewsChannel 5 at Noon    Watch
 

Gas prices determined by more than oil prices

5:50 AM, Oct 18, 2012   |    comments
  • Share
  • Print
  • - A A A +

By Heidi Glaus

St. Louis (KSDK) -- Filling up your gas tank can empty your wallet, so NewsChannel 5 viewer Becky Claas, of St. Peters, wanted to know what determines the price.

NewsChannel 5's Heidi Glaus caught up with the experts at Raymond James and Associates to find out the answer in this week's Hey Heidi! segment.

Paying at the pump is downright painful, which is why we constantly search for the lowest price per gallon or maybe even opt for two wheels instead of four.

"When you see your gasoline you're breakout will be 64 percent for the cost of the oil, 18 percent from having to refine it, 11 percent taxes and seven percent for marketing," explains Lewis Bettman, Associate Vice President, Investments at Raymond James and Associates.

It's a figure that tends to fluctuate due to oil prices.

"If oil goes down a dollar then the price of your gasoline should go down two point four cents and vice versa if it goes up up a dollar it should go up two point four cents," Bettman goes on to say.

But there are a few other factors you have to figure in, like everything happening in the Mideast.

"The other thing that governs it believe it or not are the seasons. In the summer time because all of us drive considerably more than we do in the winter time the price is higher, generally," Bettman says.

"The other thing is the economy. If the economy is not good there's less demand for gasoline," Bettman adds.

If prices are slightly different on the other side of the street, that might not have to do with any of this.

"What it's likely to be is one of those gas stations makes most of their money on slurpees and snacks and the other one doesn't so they can allow their price to be below because they're making it up on the other things that they sell," Bettman points out.

It's a complicated equation, but Bettman does have a bit of good news.

"The Raymond James Energy Group thinks that the price of oil next year will go down from it's present $91 to $65. If it does that you can envision gasoline at roughly $3.00 a gallon from the $3.59 we're talking about now," he says.

All we can really do is hope.

To find the cheapest gas prices in your area, visit the KSDK.COM gas prices guide.

If you have a Hey Heidi! question, email Heidi Glaus at hglaus@ksdk.com.

 

KSDK

Most Watched Videos