How much does it cost to produce a gallon of gasoline?



  1. 0 Votes

    Well, I can’t definitively answer this, but I can give you an idea. If a barrel of crude oil containing 42 gallons of oil costs $75, then each gallon costs about $1.78. This number doesn’t include shipping costs, refining costs, and distribution costs and therefore the true cost of a gallon of gasoline is much more than $1.78.

  2. 0 Votes

    The cost – price – of a gallon of gasoline has basically no close relation to the cost to produce it. The cost to produce it is included in its price, but the price is related to far more than the cost.

    Finding, producing, refining, marketing, transporting, and retailing costs are all separate things, and they have a huge range depending on where the original oil is found.

    And it is not clear what you mean by “produce a gallon of gasoline.” Do you want to include the cradle-to-grave costs, including finding and producing the oil? Or do you mean literally, the cost to make gasoline out of oil, in a refinery?

    If you mean the total cost, then the finding costs for oil range from $3 per barrel (divide by 42 to get gallons) to more than $90 per barrel. Production costs range from $1 to $25 per barrel, not counting things like royalties to landowners, payments to nations owning the oil, taxes, etc., which range from zero to as much as 75% of the price of the oil. Transportation costs range from $2 to $10 per barrel. Refining ranges from $6 to $20 per barrel. Wholesaleing, marketing, and retailing can range from $1 to $8 per barrel. And all of those costs vary, significantly sometimes, on a daily to weekly basis, depending on all sorts of things, such as volume of stocks available, short-term shortages due to things like hurricanes or pipeline breaks, wars and threats of wars, and many more things.

    The answer to your question is there is no answer that can be meaningful in any significant way for more than a brief moment, for some specified component of the overall price.

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