‘Why does my gas cost $4.00 per gallon?’

NOTE: I personally think our generation will be know as the generation with gold and burned all up (fossil fuels)
But, Steve Maley does a nice run down on gas prices.. 

Steve Maley - Everybody is asking that question these days. The average nationwide price for all grades this week is $3.96/gallon; Californians are paying on average $4.26, the highest in the nation. 

Why does it cost so much, especially considering that the price was below $2.00/gallon just within the last couple of years?

Nearly seventy percent of the price of a gallon of retail gasoline is the price of the crude oil it is refined from. Two graphs from the Energy Information Administration (EIA) make that point. The first shows the price of a gallon of gasoline (left axis) plotted against the price of a gallon of crude oil (right axis). The two move in virtual lock-step; if you know the crude oil price per gallon, add $1.00 and you’ll know the price of gasoline within a few cents. (At $105 per 42-gallon barrel, the per-gallon price of crude is $2.50; add a buck, and you get a gasoline price around $3.50.)

OK, so where does the $1.00 go that’s not paying for the raw product?

Nationwide, the average of state and federal taxes embedded into the price of a gallon of gasoline is 43 cents. We usually think of taxes the other way around, as with sales taxes. If you look at it that way, the effective “sales tax” on gasoline is 13.6%.

But as , tax burdens vary greatly by state.Read more by Steve Maley