Final answer:
The four main components of the retail price of gasoline are crude oil costs, taxes, refining and distribution costs, and retailer markup.
Step-by-step explanation:
The four main components of the retail price of gasoline are:
- Crude oil costs: Crude oil is the main raw material used to produce gasoline. The cost of crude oil accounts for a significant portion of the retail price of gasoline.
- Taxes: Taxes imposed by federal, state, and local governments contribute to the retail price of gasoline. These taxes vary by location and are typically added to the base price of gasoline.
- Refining and distribution costs: The process of refining crude oil into gasoline and the subsequent transportation and distribution of gasoline to retail locations incur additional costs, which are factored into the retail price of gasoline.
- Retailer markup: Finally, retailers add their own markup or profit margin to the wholesale price of gasoline to determine the final retail price.