Local gas prices have retreated from the high of $4.054 a gallon that they hit on June 18. Still, consumers are asking why it is that when the price of oil goes up, the price of gas goes right along with it, but when the price of oil drops, the price of gas is slow to follow.

"Just because you notice something doesn't mean there's a connection," said Jeff Lenard, spokesman for the National Association of Convenience Stores. "I don't think consumers noticed that prices didn't budge at the pump for a couple of weeks when oil prices started to go up. The challenge is that the perception is not the reality."

In fact, he said, gas prices lag behind oil prices both on the way up and on the way down. To explain why, he used the example of a retailer who owns a gas station with an attached convenience store, the most common type of outlet.

When oil prices are rising, that retailer might receive a notice that he will be paying 10 cents more per gallon for future shipments. The retailer will go ahead and increase his selling price for gas based on that new cost -- but not by 10 cents.

"We all know how price-sensitive customers are," Mr. Lenard said. "You may increase your price 2 cents and eat the other 8 cents."

So when gasoline prices rise, gasoline retailers lose money.

As confusing as that may sound, it is even more confusing for consumers who believe that those gasoline retailers are giant oil companies. After all, oil companies have reported record profits, including ExxonMobil's 2007 net of $40.1 billion, the largest of any public company in history.

But "major oil has a very small presence at the retail level," Mr. Lenard said. ExxonMobil announced in June that it was selling some 800 stations and getting out of the retail business. BP has been selling off gas stations for more than a year. More than half of gas station/convenience store owners, 56 percent, operate only one store, Mr. Lenard said.

"That's it; that's their livelihood."

And gasoline is only a small part of that livelihood. Just as movie theater owners make their money not on ticket sales but on concessions, service station owners make theirs on sales of in-store items rather than gasoline.

In 2007, Mr. Lenard said, the typical retailer marked up fuel by 14 cents per gallon. Since their expenses related to selling gas -- rent, credit card fees and the like -- total 12 to 13 cents per gallon, they profited by about 1.5 cents a gallon. Average sales of 4,000 gallons a day means that gasoline put $60 a day into the retailer's pocket.

During the second quarter of this year, he said, as crude oil rose toward a record price of $147 per barrel on July 11, the average retail markup for gasoline was 10 cents a gallon, meaning that retailers probably lost money "on every gallon of gas they sold for that three-month period."

After reaching that record high in July, the price of crude has plunged for two months, dropping into the mid-$90s range. For the average retailer, that means receiving a notice at some point that their next shipment of gasoline is going to cost less. What does he do with his selling price after losing money on gasoline for three months?

"You need to make for up for how hard you got hammered on margins when prices were rising," Mr. Lenard said. So as the retailer's cost for gas falls, he increases the markup on each gallon. And that is just what has happened this quarter, as retailers have increased their markup to an average of 20 cents per gallon.

What customers see is that the price at the pump drops, but not as dramatically as does the price of oil -- because it is when prices are falling that retailers make their money.

A barrel of crude oil will produce about 42 gallons of gasoline. If prices moved in lock step, a $1 increase or decrease in the price of crude would result in a 2.4 cents move (1/42 of a dollar) in the price of gasoline. A price of $147 per barrel, this summer's peak for crude, would translate into $3.50 per gallon for unrefined gasoline.

"State and federal taxes add another 49 cents even before you've paid anybody to refine it or bring it to the station," said Ron Planting, an economist with the American Petroleum Institute.

According to the U.S. Energy Information Administration, unleaded gasoline peaked at a weekly national average of $4.17 a gallon in mid-July. Two weeks ago, it had fallen to $3.70. But 15 refineries shut down in preparation for Hurricane Ike, shutting down 22 percent of the nation's crude oil production capacity. At the end of last week, nine refineries remained shuttered.

Last week's national average price for gasoline was $3.89, and it is poised to go higher this week. The average price of a gallon of regular unleaded gasoline at area pumps is $3.648, AAA East Central reported. In the wake of epic turbulence on Wall Street, crude oil posted its largest one-day gain in history on Monday. The October Nymex contract, on its last day of trading, spiked more than $25 a barrel to $130 before closing the day at $120.92, up a record $16.37. The November contract closed yesterday at $106.61, down $2.76.