Thread: The scoop on gas.

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But it's not only about the price of oil. Other costs are a factor - though they've remained relatively stable.

For example, federal and state taxes added 40 cents to a gallon of gas in the first three months of this year, roughly the same amount as they added four years ago.

California's 63.9 cents of tax is the nation's highest, Alaska's 26.4 cents the lowest. How the money is used varies from state to state, though the federal take helps to build and maintain highways and bridges.

Marketing and distribution costs - the tab for delivering gasoline from refiner to retailer - were 27 cents to start the year, only 6 cents above the cost four years ago.

The cost of refining added 27 cents to a gallon in the first quarter of this year, a nickel less than what it added in 2004, according to the Energy Information Administration.

That refining occurs at sprawling industrial complexes across the U.S., with most of the biggest along the Gulf Coast. Barrels of crude arrive each day by pipeline, ship and barge. The refineries, by heating, treating and blending the raw oil, turn out products like diesel and lubricating oil.

And, of course, gasoline.

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What happens when that gasoline makes its way to your neighborhood gas station?

Major oil companies own fewer than 5 percent of gas stations. Most are owned by small retailers - and many of them say they're struggling these days to turn a profit on gas. That's because wholesale gasoline prices have risen sharply in recent months - again, blame it on crude - but station owners have been unable to raise pump prices fast enough to keep pace.

And you can't keep jacking up the price when drivers are buying less.

Gas station owners face a balancing act: They must try to maintain a price that allows them to afford the next shipment of gasoline but not give the competition an edge.

Stations pay tens of thousands of dollars for each gas shipment before they see a cent in the register. Eventually, many make only a few cents on a gallon of gasoline, a margin that can disappear altogether when credit card fees are added in.

Thank goodness for beef jerky and sodas.

Most gasoline retailers long ago got past any illusion they can make money by selling gas. They rely on gas sales to drive traffic to their shops, where they hope auto repairs or food and drink sales will help them turn a profit.

"You're always out there competing with the guy next door - literally with the guy across the street - and worried too about how you're going to pay for your next supply," said Rayola Dougher, a senior economic adviser at the American Petroleum Institute, the oil industry's trade association.

In the Philadelphia suburb of Havertown, Pa., earlier in the week, Sunoco station operator Steve Kehler received a load of gasoline - 9,000 gallons - which, at a wholesale price of $3.729 a gallon, cost him 4 cents more than the previous load.

That left him in a sticky situation: Should he raise prices right away to recoup some of his higher gasoline expenses, or should he hold off for a couple of days in hopes his competitors will also have to raise their prices?

"I'm surrounded by $3.89's, and I'm already at $3.91," said Kehler, referring to his prices and those of some nearby competitors. "I'm going to play a little waiting game right now."

The $33,600 Kehler must pay for his overnight gasoline delivery won't be debited from his bank account for a few days. That gives him a little breathing room, time to hold prices steady. Hiking prices too quickly will hurt sales.

"I'll probably change it tomorrow night, at closing," Kehler said. "I'll go up 4 cents."

That will put Kehler at a gross margin of about 20 cents a gallon. After paying credit card fees, labor and rent, Kehler will be lucky to break even on his gasoline sales.

But many times, he loses money selling gas. Kehler, like most other service station operators, relies entirely upon his car repair business for income.

Of course, the plight of retailers is little consolation for drivers.

Mayra Perez said she works two fast-food jobs to help support her family, and gasoline is becoming harder to afford. She said perhaps the government should step in to help ease the burden, possibly by placing price limits on gasoline.

She was filling the tank of her compact car in Miami this past week to the tune of $3.89 per gallon for regular gas.

"This is horrible," she said. "On the weekend, my husband and I use only one car to save on gas.

"But then there's the cost of food, milk, eggs, the rent."

Amazingly, mostly, accurate piece, especially considering it's coming from AP................but then they couldn't resist planting the notion of government control right at the end. Would have been nice if they'd have reminded the readers that the last time that was tried we had allocation and lines at the stations.

lots of stuff to digest in those peices. I say covert to solar, drop demand and let the rest of the world fight over it. I know it would never work, but it makes you feel good for a few seconds!