, we consume approximately 20 million barrels of oil products every day, according to the Department of Energy. Just less than half of that amount is used for motor gasoline, with the rest of it going toward distillate fuel oil, jet fuel and residual fuel among other things. Each barrel holds 42 gallons of oil, which makes about 20 gallons of gasoline, which means that Americans consume around 178 million gallons every single day.
It's customary for the price of gas to increase in the warmer months, just as we are all piling into our cars in search of sunny shores. The increased demand on the gas supply translates into higher prices - classic supply-and-demand economics. But that's not the whole story. Cleaner-burning summer fuel is more expensive to produce, which can also contribute to the higher per-barrel price. .
Sometimes there are other contributing factors that lead to higher gas prices, too. Natural disasters like Hurricane Katrina in 2005 can negatively impact prices. Generally, though, prices increase as a result of the global crude oil market tightening and supplies lowering. And when we experience a rate of demand that outpaces the refineries" capacity to produce, prices go up.
Anatomy of a gas dollar.
To get a clear picture of why gas prices go up or down, it is useful to have an understanding of where your money goes when you pay for gas. Just like anything else you buy, the money doesn't all end up in one pocket. There is a chain of groups that each contributes to the price of the product, and they all get their piece of the pie. Despite what the media may want us to think, it is not solely the price of crude oil that determines the price of gas. .
It doesn't matter how high gas prices soar; each body with their fingers in the pot needs to be paid. By way of illustrating how this works, here is a breakdown of where your money goes for each dollar you spend on gas, according to the Department of Energy:.
