According to the U.S. Energy Information Administration, the costs of crude oil on the world market, as well as federal, state, and local taxes, make-up the largest components- 74 percent - of the total price of a gallon of gasoline. The federal gasoline tax is 18.4 cents a gallon, and state excise taxes average 19.96 cents a gallon. Some states and localities also add sales and excise taxes to the price of gasoline. A 19 percent share reflects the cost to refine crude oil into gasoline.

That means about 93 percent or more of the cost of gasoline is determined before it ever reaches your local convenience store.

The final 7 percent share accounts for all other costs associated with getting the gasoline into your gas tank - everything from transporting the gasoline from a storage terminal to the retail convenience store, including all the costs associated with operating the convenience store, such as electricity, employee salaries and benefits, and equipment.

Prices are a product of supply and demand. Good weather and vacation seasons typically increase the demand for gasoline by approximately 5 percent. Prices during the summer months are typically 3.5 cents a gallon higher than the rest of the year, even after accounting for changes in crude oil prices.

Summer is also when gasoline producers must put out new summertime formulations of gasoline required by the Environmental Protection Agency. This can affect prices, as certain areas of the country can no longer bring in supplies of regular gasoline to meet higher demand in those areas that require specific fuel formations.

According to the U.S. Department of Energy, crude oil and gasoline inventories are below normal and are expected to remain low through the driving season and into the fall.

The same conditions that contributed to sharply rising prices last year, such as low inventories, high crude oil costs and susceptibility to system disruptions, still exist.

"Boutique Fuels" - One factor that has had serious impact on domestic gasoline prices and supplies has been the crippling of America's fungible grade gasoline system due to government regulation. Because of overlapping federal, state and local regulatory requirements, the nation's gasoline markets are now divided into distinct areas with regional formulations - nicknamed "boutique" fuels. These regulations also raise the costs of producing, fuel, and leave the nation's fuel supply system vulnerable to disruptions when refineries or pipelines shut or break down. IN 1990, there were over 25 different gasoline formulations, all being transported and distributed through the nation's motor fuel infrastructure.

Supply disruptions - Anything that slows ore stops production or distributions of gasoline for a short time, such as planned or unplanned refinery maintenance or a pipeline break, can cause prices to climb regionally as your local fuel marketers compete against one another for the limited supply. An because "boutique fuels" are not interchangeable, fuel from one market may not be eligible for sale in another market that may be experiencing supply shortages.

Local competition - Selling gasoline is a very competitive business. Differences in gasoline prices at nearby retail locations can result because gasoline retailers buy their gasoline from different, and competing, wholesale suppliers. Some stores may be able to pick and choose among wholesalers, while other may be tied into long term contracts that limit them to a particular supplier. Also, some retailers operate in high-traffic areas and are better positioned to gain income from volume. For example, a station at a busy highway intersection may see far more traffic than one on a quiet street, so the owner of the highway station may be better positioned to operate on lower margins through a higher volume of customers.