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wingfield65 t1_iv1kmjd wrote

Reply to comment by kilog78 in What factors contribute to gas prices? [OC] by USAFacts_Official

Refineries purchase crude on open market. Crude price function of supply and demand.

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kilog78 t1_iv20j48 wrote

But isn't that captured in the green bar?

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wingfield65 t1_iv2ze2s wrote

That’s correct. That’s why the height of the green bar varies over time.

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kilog78 t1_iv2zut0 wrote

Sorry if I’m being dense, but shouldn’t the cost to refine remain relatively constant whether crude is $50 or $100ppb? Labor, other inputs, maybe regulation would change the cost, but otherwise not related to the cost of crude.

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wingfield65 t1_iv3aovb wrote

there's a utility cost to refine crude. utility prices go up when cost of hydrocarbon goes up. I just resigned my electric contract recently and my cost went from 12c/kWh up to around 19c/kWh. that said, agree that the other costs should remain fairly constant over time.

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