What's the lowdown on high gas prices? - WALB.com, South Georgia News, Weather, Sports

What's the lowdown on high gas prices?

MAULDIN, SC (FOX Carolina) -

Driving a car is expensive these days. Filling up the gas tank has been, on average, more than $3.50 per gallon for more than a year.

FOX Carolina wanted to take a look at what factors into the cost of gas and whether there was any sign of relief down the road.

Greenville County high school student Lauren Gault drives an SUV. She admits it is expensive for her to travel to and from school and on errands around the Upstate.

"It costs about $80, actually, to fill it up," said Gault. 

Travis Ballenger agrees. He drives a smaller car, but one that requires premium gasoline.  

"Every time I fill up, it's definitely hitting my pockets," said Ballenger.

But what do the experts say? Stewart Spinks has owned and operated Spinx convenience stores and gas stations for 40 years. He has 65 locations and 700 employees. 

"I love it when positive things are happening," said Spinks. "I really don't like it when things are going the other way, so I'm really trying to please the customers."

Spinks explained that as gas prices rise, his profits go down. He said retailers get a small cut from the sale of gas. This year, it is between 7 and 8 percent. The number has been as high as 12 percent in the past five years. 

The cost of a gallon of gas can be broken down into four categories. The U.S. Energy Information Administration reports those areas are crude oil, taxes, refining, and distribution and marketing. 

So far in 2012, the average gallon of gas is $3.60. More than 71 percent of that goes to crude, nearly 13 percent to taxes, nearly 8 percent to refining and more than 7 percent to distribution and marketing.

The crude category is the dominant contributor to retail prices. But that category can be broken down even more.

One fluctuating number that has an impact on what consumers pay is oil speculation. Stewart Spinks explained that the number can go up or down, depending on conflict around the world or the status of the economy. 

In 2011, Goldman Sachs reported that speculation is responsible for up to 20 percent of the price of oil. That means speculators or investors are driving the price, not market forces like supply and demand.

"Let's say the investors are betting that crude oil is going to be tight and therefore, is gonna be rising in value. Then the bet is crude is going up," said Spinks.

Some lawmakers have proposed legislation to control oil speculation. But two from the Upstate disagree. 

Congressman Jeff Duncan and Sen. Lindsey Graham told FOX Carolina they believe American dependence on foreign oil continues to keep the price of crude high. They advocate for off-shore drilling and the establishment of the Keystone XL pipeline from Canada to the U.S. 

No matter what happens, many drivers admit there is little they can do. 

"I use my car to go to work, to go to recreation, so I need my car," said Upstate driver Howard Hom. "I've gotta fill up."

Gault agreed.

"You have to have it. You have to go to school. You have to go to work, you just have to have it," Gault said.

Copyright 2012 FOX Carolina (Meredith Corporation). All rights reserved.

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