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According to an August 31, 2003, online article from the Kansas City Star, gasoline prices in the Midwest have historically been among the lowest in the nation (Everly). However, within the last month, we are now slightly above the national average, which, according to the article “This Week In Petroleum,” rose by 12 cents per gallon between August 18 and August 25, 2003 to an average of $1.74 per gallon. Drive around the Kansas City Metropolitan area and one will encounter prices ranging from $1.49 per gallon at the Flying J station in Peculiar, Mo., to $1.79 per gallon at the BP station in Overland Park (“KCGasPrices.com”). So what causes the dramatic fluctuations in gasoline prices? The dramatic fluctuations in gasoline prices are a result of a highly competitive gasoline market, and according to the Energy Information Administration, the basic costs to produce and deliver gasoline to consumers encompass the cost and availability of crude oil, which is approximately 46% of the price; marketing and distribution costs, 12% of the price; refining costs and profits, 14%; and federal and state taxes, 28% (“A Primer”). Gasoline is shipped from refineries to retail stations by pipelines or trucks, and a number of price markups, which vary from region to region due to the formulations required to produce different grades of gasoline, may be added to the consumer’s price along the way (“Gasoline Price”).
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