The Price Of Gasoline

In the previous post, Cogport addressed the Affordability Issue on the Price of Beef.

We continue that theme with the Price of Gasoline.

The policy of “Drill Baby Drill” has worked to increase crude oil supply and reduce prices.  The cost of crude oil is down by 21% over the last year.

However, the retail cost of Regular Gasoline has not changed. That is referred to as “Sticky Inflation.”

The average cost of gasoline is exactly the same as one year ago at $3.05 per gallon.

There are many factors that affect the retail price of Gasoline.  The input cost of Crude Oil is approximately 40% of the final retail price of Gas. The other 60% is the cost of refining, transportation, and distribution.  Those are the factors that have resisted decline with inflation of costs over the last 5 years.

Price History

Year              WTI Crude Per Barrel         Regular Gasoline Per Gallon

2020                      $ 39.16                                       $ 2.11

2021                      $ 68.13                                       $ 3.40

2022                     $ 94.90                                        $ 3.69

2023                     $ 77.58                                        $ 3.32

2024                     $ 76.63                                        $ 3.05

Current 2025       $ 58.10                                         $ 3.05

From 2020 to 2022 the retail cost of Gas rose by 75%.

That was due to U.S. Federal Policy and other International forces.

The peak of crude oil price in 2022 is down by 38%.

The peak of Gas price in 2022 is down by only 17%.

Sticky Inflation

This is where factors other than Crude Oil cost come into play.

The peak of crude oil price in 2022 is down by 38%.

The peak of Gas price in 2022 is down by only 17%.

You may think that Oil Companies are keeping excess profits.  That is not the case.

In fact, the Top Seven public oil companies in the U.S. make a profit of only 4.8% of Revenue.  That compares to S&P 500 stocks that have a return of 12.3% of Revenue.

Oil Companies earn much less than other Big Companies in the U.S. economy.

Here are the Other Factors affecting the price of Gasoline:

Even if crude-oil prices drop, demand for gasoline, refinery output, and gasoline inventories influence the wholesale and retail price.

That is the Economic Law of Supply and Demand.

The capacity and cost of Oil Refinery for Gasoline have become a major issue. 

Consider this:  

A new Oil Refinery has not been built in the U.S. for 50 Years.

The existing plants are running at 90% of capacity – that is above the maximum and should be lower to allow for down time and unexpected events.

The cost of maintaining and upgrading these old plants has become excessive.  Thus, the cost of refining gasoline has risen, not fallen.

This is the major factor why Gas Prices have not fallen when the price of crude oil did.

New Refineries and Modern Technology are needed.

See the next Post for more information about the Oil Refinery situation and future consumption of Gas.  Cogport will propose what can be done.

David Hollaender                                                  28 November 2025

Cogport.com