The Reality of Gas Prices

I came across this on the Yahoo message boards.  I requested and was granted permission to repeat here.  I invite others to see if the math makes sense.

Take the opportunity to visit the following website.

http://tonto.eia.doe.gov/...

Look at the Graphic to the right of the page.

Now breakout you calculator, and let's look at some facts.

1. Crude Oil is sold by the Barrel. A barrel is 42 gallons.

2. That Crude Oils is refined by separating the complex Hydrocarbons. Different Hydrocarbons make different products. There are seven products that are made out of each barrel of Oil.

3. 30% of the barrel or 12.6 gallons is actually used for the production of Gasoline. (where does this come from?)

4. The refineries add 6.8 gallons of Additives that creates 19.4 gallons of finished product. (again, source)

Those are the basics. Now let's look at that graphic again. You see that it is for the Month of May. It shows that the retail price is $3.77 per gallon, and that Crude Oil represents 75% of that Cost.

Now here is where the calculator comes in. Take 3.77 and multiply it by .75. That means that this site is claiming that the Crude Oil Component is $2.83 Per Gallon. If you take 2.83 and multiply it by 42, you get $118.86. That is @ what Crude was selling at in May 08. So what is the Problem?

Simple. The ratio of Crude Oil used to Gasoline created is not one to one. It is 12.6 to 19.4. Or .65 gallons of Crude Oil per gallon of Gasoline. If you take the 2.83 and multiply it 12.6 then divide that answer by 19.4, you get $1.84 per gallon Or 49% of the Retail price per gallon. Where does that remaining 26% go? To the Oil companies of course. This allows the Oil companies to claim only a 10% cost and profit ratio while actually taking in 36%. The Oil companies are trying hard to hide nearly a dollar a gallon profits.

And the kicker of all this? That link is to a government website. The Department of Energy is complacent in this scam.

It certainly makes no sense that the break down of the price of a gallon of gas does not show the oil company profits.

I am also curious about some of the base assumptions.  Can anyone validate these?