You can stand at a pump on Garth Road and see the place that made the gasoline. The refinery is a few miles away. So why does the price on the sign move every week, and who gets the money?
The federal Energy Information Administration breaks the price of a gallon into parts. Here is roughly how it split in 2025, nationwide.
- Crude oil: about 51 cents of every dollar. This is the raw oil that comes out of the ground. Its price is set on world markets, not in Baytown.
- Refining and getting it to you: about 32 cents, together. Refining is what it costs to turn crude into gasoline, plus the refiner's profit. Getting it to you means pipelines, trucks, the station and the person who stocks the ice chest.
- Taxes: about 17 cents, federal and state.
So about half of what you pay is the oil itself. That is why the sign jumps when something happens on the other side of the world. A pipeline outage in another country, a war, a cold winter in Europe: the price of crude moves, and the sign follows a few days later.
The tax part, in cents
The federal government charges about 18 cents a gallon. Texas charges 20 cents a gallon. Those amounts do not go up when the price goes up. They are a flat number of cents, not a percentage. On a gallon of regular in Texas, that is about 38 cents of tax. Texas charges less than many states, so taxes are a smaller share of the price here than the national figure above.
Texas sends about three-quarters of its gas tax to highways and about one-quarter to public schools. The federal tax goes mostly to the Highway Trust Fund, which helps pay for highways like I-10.
Why living next to a refinery doesn't make gas cheap
It feels like it should. The gasoline is made here, so it should cost less here. But a refinery sells to whoever pays the most, and the oil it buys costs the same world price whether the refinery is in Baytown or in Ohio. What Baytown saves is mostly the trip: gasoline made here does not need to travel far by pipeline or truck. That is part of why prices on the Gulf Coast are often among the lowest in the country.
What you can do about it
You cannot change the price of crude. You can change how much of it you buy.
- Check tire pressure once a month. Low tires waste gas.
- Combine errands. One loop down Garth beats three separate trips.
- Watch the day of the week. Prices at many stations change on a pattern. Notice yours.
- Don't drive across town to save two cents. The trip can cost more than you save.
The next time the sign changes, you will know which part moved. Most of the time, it is the oil.
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Sources
- U.S. Energy Information Administration, "Gasoline explained: Factors affecting gasoline prices" (2025 shares: crude oil 51.4 percent, federal and state taxes 16.6 percent; federal excise tax 18.30 cents a gallon plus a 0.1 cent tank fee).
- Texas Comptroller of Public Accounts, Gasoline Tax (20 cents a gallon).
- Texas Constitution, Article VIII, Section 7-a (three-quarters to the State Highway Fund, one-quarter to the Available School Fund).