Cheap Gas? Where?
Posted March 21, 2011 in Moving Beyond Oil
Gas prices across the country are rising, and that has most Americans concerned. And rightly so - the painful impacts of rising gas prices are very real for families and businesses across the country.
However, while gas is more expensive than we are used to here at home, looking across the globe, Americans pay far less for gasoline than people in nearly any other nation. And we're not just talking about the wealthy western European countries like England or Germany.
Gas in the U.S. is cheaper than it is in places like:
- Brazil: $5.99
- Bulgaria: $6.63
- Canada: $5.89
- China: $4.47
- Estonia: $6.57
- Hong Kong, China: $7.67
- India: $4.57
- Lithuania: $6.89
- Portugal: $8.20
- Russia: $3.68
- South Africa: $4.78
And contrary to popular belief, gas is not expensive in these places due to a lack of supply: According to CNN:
Norway is awash in oil because of its thriving oil industry in the North Atlantic. The United Kingdom also has access to the oil fields in the same region.
Italy has deep corporate ties with Libya. Its oil production company, Eni, is the largest producer in Libya. But even in the best of times, without civil war in Libya, gas in Italy is expensive when compared to the U.S. Italians on average paid $7.77 a gallon at the end of February, according to the most recent data from the IEA.
"The difference between countries comes down to taxes and subsidies," said Tom Kloza, the chief oil analyst for Oil Price Information Service. "Prices are incredibly high in Europe because of the stiff taxes that EU countries put on fuel. The same holds true for many other countries."
As I've said before, on the global market, pre-tax oil prices are set largely on the basis of demand. And there's little any one country can do to lower that base price. So which countries do pay less than we do in the U.S.?
- Bolivia: $2.26
- Iran: $1.47
- Iraq: $1.44
- Venezuela: $2.62
These countries and others that are paying less for gasoline tend to have several things in common - massive oil reserves relative to population, a state-owned domestic oil industry, often as a main driver of GDP, and, perhaps most importantly, some even subsidize gasoline for citizens.
All of this is not to say that Americans are paying either too little or too much, and in the short term, rising prices will only hurt Americans who have few other options but to suck it up and fill their tanks no matter the cost.
What these numbers do tell us is that, for better or worse, the price of gas is largely out of our control.
What we can control is our transportation and energy policy, reorienting both to advance energy efficiency and alternatives to oil. This means making our vehicles more efficient, speeding the manufacture and deployment of electric vehicle technology, and implementing a 21st Century national transportation policy to offer people more public transportation options, better connect our neighborhoods and economic areas, and more successfully manage our road network.
All of these steps can ensure that Americans have access to affordable transportation options, no matter how high the price of oil goes.
Header image by dougww, used under a Creative Commons license.
