Gas Prices dropped in your area ?

[Ghoulish Delight]

Originally Posted by Kevy Baby

The 50% vs 25% doesn't mean too much in and of itself as gasoline is only one part of a barrel of oil.

The 2nd part of your analysis is right, but this part is not, just to be pedantic. If pay $180 for a barrel of oil and use, say, 70% of that barrel to make gasoline, than I paid $126 for the portion of oil used for gasoline. If I then buy the next barrel at $90 and use the same amount of oil, then I've paid $63 for that portion of oil. That does indeed scale.

But you are correct that just because raw material costs drop doesn't mean overall production costs drop in proportion.

[Kevy Baby]

Originally Posted by Ghoulish Delight

The 2nd part of your analysis is right, but this part is not, just to be pedantic.

Alright Mr. Pedantic...

I actually rewrote the post and forgot to clarify that one line. It should have more correctly stated that "One cannot expect the cost of gasoline to drop the same percentage as the cost of oil as the raw material cost only represents a part of the cost of a gallon of gas."