Unlike oil companies, who take a percentage of pump prices, government gas taxes are fixed so the government does not profit from rising prices, Krullwich reports. Gas taxes make up about a quarter of that extra dollar spent for a gallon of gas, he says. The rest is split among refineries, tankers, pipelines, traders and others who get oil to consumers.
The record prices of 2007, though, were not accompanied by fears of a US recession that are currently reverberating through the global economy. Those fears triggered a drop in oil prices Tuesday to $89.85 a barrel, the lowest it has been for more than a month.
They also feature an enlightening video from ABC News:
Companies expecting record profits, but recession fears cause decrease in oil prices
In an animated Web video that plays a bit like "School House Rock" without the catchy theme song, ABC News explains where the extra money Americans are putting into their gas tanks actually goes.
"Compared to three years ago, Americans are now paying an extra dollar for every gallon of gas, and if you're wondering where those extra dollars go, well for every dollar you pay, about half goes to the oil company that pumped the oil," reports correspondent Robert Krulwich. Accompanying animation shows a suit-wearing, suspicious looking "oil company guy" tearing away half of a dollar bill.
The short feature is indicative of Krulwich's style; he's been called "the man who simplifies without being simple," by New York magazine.