A tank of gas

[noise]

Been watching pretty close how the cost of a barrel of oil and a gallon of gas have inflated and deflated. My math skills are not the greatest so far as figuring out percentages so I thought I'd bring in some facts off an article I just found. First, roughly two months ago the price for one gallon of gas was 4.59 & 9/10th per gallon. So today I caught this article:

_http://biz.yahoo.com/ap/081006/oil_prices.html Which is saying:

Oil prices have tumbled 40 percent since peaking at $147.27 a barrel on July 11. A drop below $85 a barrel -- an almost certainty in the current environment -- would leave prices where they were in late October, wiping out all of the past year's massive gains.

The point/question I'm trying to get clear, though I can't, again, figure out what the percentage specifically is. Why is a gallon of gas on average in America $3.44 & 9/10ths? At best that is a 25% (I think) drop, but not 40%. This average is according to _http://www.tacomagasprices.com. While typing this out, the information on "gasbuddy" is implying (and it may just be for my locality) that the price of gas in on the rise.

So I guess my main question is, if the cost of a barrel of oil went down 40% from $147.27 what should the actual cost of a gallon of gas be, pretending that the dictionary isn't the only place to find 'fair'?

 

[Peam]

So I guess my main question is, if the cost of a barrel of oil went down 40% from $147.27 what should the actual cost of a gallon of gas be, pretending that the dictionary isn't the only place to find 'fair'?

Just speculating here, but oil has to be processed into gas. Now although a barrel of oil can go down 40%, which for example would be :- $147.27 * 0.6 = $88.362
They don’t have to pass the 40% drop in price of the oil onto the customer after it’s been processed.
I.E. They make more profit?

 

[noise]

HI Peam,

Thanks for the reply. That makes sense. Or, for them, cents/dollars.. I was thinking, how much were we paying for a gallon when a barrel was 85'ish dollars? Think it was around $2.77 but can't recall specifically. Guess we have to adjust for increasing the size of their Inflated pockets.