If big oil producers Exxon,Shell etc are the ones refing the stuff, why is gas price based on stock mkt bids,

Exxon refines the raw crude oil that's imported from wherever. The price they pay for the crude oil is determined by the futures market. Then, Exxon just marks it up a little and sells it to the gas stations.If big oil producers Exxon,Shell etc are the ones refing the stuff, why is gas price based on stock mkt bids,
Price of fuel at the pump is not based on the stock market. The price of crude oil may be influenced by ';futures'; and market indicators; however, our pains at the pump are primarily based on the following:





1. Cost of crude oil. Typically, the price of crude oil is characterized as $XX.XX per barrel. Expense is associated with direct purchase of crude oil and/or drilling operations.





2. Refining of crude oil. The standards for refined fuels vary from state to state - one size does not fit all - the result, increased cost at the pump.





3. Transportation. Most gasoline is processed near the ocean where large supplies of crude oil are introduced into refineries. The expenses associated with transporting the crude oil to the refineries and gasoline from the refineries is represented in each gallon purchased at the pump.





4. Marketing. Why you have to market a product that everyone NEEDS is beyond me. 鈥ind of like watching television commercials about the United States Post Office; gratuitous and unnecessary expenses.





5. Research and Development. Lookin' for more oil, researching better ways to process it, and evaluating alternative fuel sources are all expenses that get passed on to consumers.





6. Organizational overhead. Administrative offices, computers, lawyers, $400 Million retirement packages (for a single employee), insurance, red Swingline staplers, and vaults for all that cash.





7. Prof1t # 1 - the oil company. They're not doing all this work just to break even. We've got shareholders with their hands out.





8. Profit # 2 - the gas station. He's not selling you gas just so you'll go inside and pay $2.00 for a cup of lukewarm %26amp; burnt coffee.





9. Local, State and Federal taxes. These taxes are typically associated with road maintenance and conservation initiatives. This could be in lieu of sales tax or in addition to sales tax.





10. Supply and Demand? If less oil is available, the cost goes up. If supplies are abundant; costs are reduced to stimulate demand.