Oil-to-Gas Multiplier?

[Bushido]

Quote from ScapGF:

That makes sense to me, but it isn't playing out in the market. For example, crude is down approximately 17% off of its high. Now, gasoline at the pump topped off at $4.12/gallon and is currently at $4.00

But if gas were down 17% off of its highs then that would make it $3.42/gallon.

Clearly there is a lag involved so we are going to see lowe prices at the pump if the price of oil remains constant at today's level. But it doesn't seem to me like it would go to $3.42

Why is that?

$3.42 is almost correct, you just need to factor in the tax/excise paid by the oil companies for the mark-up which is approx 17-18% (dont remember the exact figure). And it may deffer from state to state.

Factor that in and you will get the correct figure.

 

[ScapGF]

Quote from Bushido:

$3.42 is almost correct, you just need to factor in the tax/excise paid by the oil companies for the mark-up which is approx 17-18% (dont remember the exact figure). And it may deffer from state to state.

Factor that in and you will get the correct figure.

To try and get around the tax problem from state to state I was using the gasoline figures posted as the National Average. Wouldn't that at least help smooth the quality of the calculation?

Again, lots of good info posted.

Best,

 

[CollegeTrader33]

Quote from ScapGF:

To try and get around the tax problem from state to state I was using the gasoline figures posted as the National Average. Wouldn't that at least help smooth the quality of the calculation?

Again, lots of good info posted.

Best,

Yes, thanks all for the productive comments.