Where Your Gas Money Goes

The Union of Concerned Scientists explains how oil companies profit from your pain at the pump.

| February 8, 2013

pumping gas

Reducing oil use is a smart strategy for our pocketbooks, our climate and our health. 


This article was reposted with permission from the Union of Concerned Scientists.

Every year, Americans spend hundreds of billions of dollars at the gas pump, but where does that money go? To find the answer, UCS examined how drivers' gas dollars are distributed among all the stakeholders involved in getting oil from the ground to your gas tank.

The results are clear. Your gas money doesn't support your local gas station, nor does it benefit you financially, even if you own oil company stock. Most of the money you spend at the pump goes directly to one place: oil companies.

You have a choice when it comes to your oil use: Continue pumping your money into oil company profits or invest in fuel efficiency and keep the profits in your pocket instead.

Americans Spend A Lot of Money on Gas

Vehicle owners, on average, spend almost as much on gas as on the vehicle itself.  • Vehicle owners, on average, spend almost as much on gas as on the vehicle itself.  

• A typical American driver will spend more than $22,000 on gas over the lifetime of a vehicle purchased in 2011 with average fuel efficiency (22.8 mpg).

nicholas johnson
3/5/2013 2:51:55 PM

Thank you, I haven't seen the breakdown of this before. Very insightful.

jerry segers
3/2/2013 4:01:14 PM

I don't know where the Union of Concerned Scientists get their information, but I find this article grossly misleading. The information they used for profits at the local store and taxes are reasonably correct, but the information about the money going to the oil companies while probably correct is very misleading. If you look at the SEC report for 2011as reported in Wikipedia on March 3, 2013 Exxon/Mobile took in approximately 486 Billion dollars. Of that only 75 billion were actually profits. The rest went to pay operating expenses including the salaries of 83 thousand people and hundreds of supplier companies with their employees. Of this 75 billion profit they paid the government 32 billion in taxes leaving only 41 billion in actual profits (A 42% tax rate). While 41billion looks like a lot of money they are a large company with assets of 359 billion. These assets are what investors have purchased over the years and the means the company has to make money while supplying you with fuel. With these numbers you can calculate the return on investment of about 11% which is held for growth or returned to investors (Stock Holders). (This is equivalent of you putting your money in the bank and getting 11% interest - which you could do if the FED were not holding interest low) This low number is why the Union of Concerned Scientists note that you will never get your gas money back by investing in the oil companies. What they should have said is that you can not get your money back in profits on your investment because the oil company profits are very low. Do no misunderstand, I am no friend of the oil companies, but it infuriates me to see anyone making legitimate companies look bad just to make a point. I happen to rate the oil companies slightly above Monsanto. They only reason they are higher is I need their product and they are not tampering with my food supply.

gerard lavallee
3/2/2013 11:30:35 AM

I prefer that they get a return on their investment so they can continue research & development of future oil production. It will be a long time before we can produce vehicles that do not use petroleum fuels and we will need gasoline & heating oil in the meantime.

richard anderson
3/1/2013 11:01:53 PM

I strongly object to these kinds of articles which demonize corporations for making money. That is what they are in business for! That is why those of us who work for a living work! We do it to make money! Perhaps MEN ought to look at themselves. Do they seek to be profitable? Do your writers and editors work for free? If you answer yes to either of those questions, then there is one word for you - hypocrite!

john & virginia ledoux
3/1/2013 9:50:51 PM

I buy and invest in what I want. No more kool-aid.

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