Good Question: Where Does Our Money Go When We Buy Gas?
MINNEAPOLIS (WCCO) -- Gas prices have been a little more tolerable for a while now. Or at least we don't cringe every time we pull up to the pump.
But as cheaper gas flows into our cars and less money leaves our pockets, how much of that $2 per gallon gas is helping with road repairs?
"I would imagine it's got to be the suppliers," one driver at Bobby and Steve's in Minneapolis said.
For every gallon of gas you pay, the state gets about 28 cents. The federal tax takes another 18 cents. But those numbers stay the same no matter what happens.
"The fuel tax is not tied to a gallon of fuel. It is a flat, standard tax. It's the same whether you are paying $2 a gallon or $4 or $5 a gallon," MnDOT spokesman Kevin Gutknecht said.
Gutknecht said the state constitution requires that the gas tax be used only for transportation purposes. And the gas tax is only a small slice of that $2 per gallon pie. Taxes take about 17 percent of that $2 dollars. Distribution and marketing take about 26 percent. The refineries take another 1 percent.
But you're mostly paying the very people who pump the gas out of the ground. Crude oil accounts for about 57 percent of the $2.
"The oil companies are the big winner. Yes, when it comes to a gallon of gas the oil companies clearly are making the bulk of what we pay," Gutknecht said.
In 2008, lawmakers agreed to increase our state gas tax from 20 cents a gallon to about 28 cents a gallon. Before that, it hadn't been increased in 20 years. The national average for state gas tax is 24 cents a gallon, so we are a little above that right now.
Click here for a chart detailing the breakdown of how the money paid toward a gallon of gas gets divvied up. (NOTE: Chart is based on a per-gallon average price of $2.54, which were the figures reflective of Dec. 2014.)
