Claremore Daily Progress

June 24, 2011

What’s up with fuel prices?

REP. BEN SHERRER
District 8

CLAREMORE — For many Oklahomans the cost of gasoline makes up a large part of their monthly budget. When gas prices go up, it often means families must rearrange their priorities so that they can simply fill their cars with fuel.

The strain on my family’s budget caused us to recently move to more fuel efficient models.  Though it can be frustrating, the increase of gas prices over the last few months actually signals that both Oklahoma and the United States are coming out of a recession that has crippled our economy.

When gas prices rise constituents often ask me about what causes the price increases and what can be done about it.  So I’ll take this opportunity to relay some facts about gas prices at the pump. 

Sixty-eight percent (68 percent) of the cost of gasoline is determined by the price of crude oil. As the global economy is recovering the demand for oil is increasing -  therefore driving up the cost of gasoline. In addition to the demand for it, oil prices can also be driven up by weather events, geopolitical risks, inventories, exchange rates and spare capacity. The recent severe storms as well as the unrest in some of the largest oil producing countries have contributed to the recent rise in gasoline prices.

The remaining 32 percent of gasoline prices go to refining and retailing the gasoline as well as the excise taxes that are associated with gasoline. Oklahoma ranks 46th in total gasoline excise taxes and fees, making us the lowest in our region.  States that have temporarily suspended their fuel taxes have seen an increase in demand which has resulted in price increases.

I guess the answer is simple: we’re just at the mercy of the oil companies.

If you need assistance or would like to visit about an issue, please feel free to contact my capitol office at 1-800-522-8502 or email me at bensherrer@okhouse.gov . Until next week, God bless you.

Ben Sherrer is state representative for District 8.