Local News

Taxes Account For About 25 Percent of Gas Price

Posted March 13, 2000

— Ever wonder why the gas on one corner is higher than gas on another? There are several reasons.

Each brand is priced differently, and each station buys a different brand.

The price on a gallon of gas includes transportation to bring it to the station, as well as:

  • state taxes -- 22.25 cents in North Carolina
  • federal taxes -- 18.4 cents
  • the profit the retailer makes -- 2 centsMost of the taxes in North Carolina are used for road construction.

    The profit margin is very small for gas stations. Selling gasoline does not keep a station in business. The profits come instead from automotive repairs and food, drink and cigarette sales.

    As the price continues to rise, remember gas is still a bargain compared to what it cost in the early '80s. It is also a bargain compared to other liquids.

    "Compared to a gallon of milk, bottled water, soft drinks, beer, things like that, gas is still cheaper than those commodities," says Gary Harris of the North Carolina Petroleum Marketers Association.

    The price is also a bargain compared to what gas costs in other countries; it is $3.50 a gallon in Japan and $4.50 a gallon in Great Britain and Norway.

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