How Gas Prices Work: What You Pay For in a Gallon of Gasoline
The four building blocks of the U.S. pump price — crude oil, refining, distribution and marketing, and taxes — and why each one moves.
Updated October 8, 2026
📊 U.S. national averages · EIA week of Nov 9, 2026
EIA breaks the retail price of a gallon of gasoline into four components:
- Crude oil — usually the largest share, often half or more of the price.
- Refining costs and profits — vary by season and region; they spike when refineries go offline.
- Distribution and marketing — pipelines, trucks, storage and station costs and margins.
- Taxes — 18.4¢ federal plus state and local taxes.
Why prices rise faster in summer
Summer-grade gasoline, required to reduce smog, is more expensive to produce, and demand peaks during the driving season.
Why a refinery outage can raise prices
Some regions — the West Coast in particular — rely on a small number of refineries. When one shuts down unexpectedly, local prices can jump within days.
Why stations change prices at different times
Stations buy fuel at wholesale prices that change daily, but they refill tanks at different times and set prices based on local competition.
See how crude affects gas prices in oil vs gas prices.
Frequently asked questions
What share of the gas price is taxes?
It depends on the state; taxes typically make up roughly 10–20% of the U.S. retail price.