Business: How the Price Is Pumped Up

At the source, OPEC oil is cheaper than dirt. The cost of drilling, pumping and moving it from the Saudi Arabian deserts to Persian Gulf ports, for example, is about 30¢ per bbl. That is less than 1¢ per gal, since there are 42 gal. in one barrel. But by the time the crude is shipped, refined and sold as gasoline to U.S. motorists, the price rises more than 7,000%.

The first and biggest boost is made by the Saudi government. Its royalties, fees and taxes bring the price per barrel up to the cartel rate of $14.55, or 35¢ per gal....

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