The price of gas: it goes up,it comes down.

But what is behind it all?

Well the average price of a litre of gasoline in Canada can be broken down into four components:
crude oil which makes up around 40% of the cost,
refining oil into gasoline that's about 20%,
retailing and marketing gasoline 5%,
and the remaining 35% of the cost comes from taxes.

Let's take a closer look at each component.

Oil in Canada is either imported or produced. 

Here in both cases the price of a barrel of oil is set in international markets.

The price of imported oil can be subject to external events like supply chain disruptions or production cuts or increases.

Domestically produced oil is mostly heavy crude from Western Canada.
It needs more intensive refining compared to imported oil which is usually a lighter grade.

Gas produced at refineries is sold to retailers at a price that includes the costs incurred throughout the supply chain including the price of crude oil, refining margins and the cost of transportation to the terminal.

But that's not the price consumers pay: retail prices also include the operating costs and profit margins of selling fuel at a gas station.

But the biggest difference between the prices that refiners charge to retailers and the price you pay at the pump comes from the taxes government apply to gasoline.

Depending on where you live you may pay federal, provincial and municipal taxes on gasoline.

So there you have it. Crude oil, refining, retailing and taxes:  whether prices rise or fall these four parts add up to what you pay to fill'er up.