Originally Posted by Jack G

Another considerationI understand the basics of the market influences of supply and demand relative to their effects on increasing and decreasing prices of products purchased in a free economy. My limited detailed technical knowledge of how gasoline is produced is defined as being a fully automated process performed within a petroleum refinery. Simply stated, crude oil enters the refinery and exits as a ready-to-use gasoline or diesel fuel product. The human labor content of this operation is basically fixed and minimal when compared with other types of product manufacturing.

Public knowledge of what the real market cost is to produce a gallon of gasoline is unknown which is okay in a free market economy. We hear almost on a daily basis the market price for a barrel of crude oil is the prime number that the petroleum industry uses as a reference for adjusting the market price of gasoline, diesel, and other petroleum products.

I have been trying to understand how the radical changes in the price of gasoline is determined. My simple analogy tells me price changes occurring at the pump are not consistent or closely connected with the changes in the price of crude oil. As previously stated, refining of crude oil into gasoline is an automated process. Let’s assume 1 barrel of crude oil contains 50 gallons. If the market price of (1) barrel of crude oil changes by +/- $1.00 USD this should change the cost of producing (1) gallon of gasoline by +/- $.02 ($1/50gallons). I do believe what we pay at the pump is a lot different than my simple analogy.