WHY ARE GAS PRICES so low….compared to Europe?
Gasoline costs roughly the same to make no matter where in the world it’s produced. The difference in retail costs, is that some governments subsidize gas while others tax it heavily.
In many oil producing nations, gas is absurdly cheap. In Venezuela it’s 12 cents a gallon. In Saudi Arabia it’s 45 cents
The governments there forego the money from selling that oil on the open market – instead using the money to make their people happy and encourage their nations’ development.
Subsidies, many analysts say, are encouraging rampant demand in these countries, pushing up the price of oil worldwide.
In the United States, the federal tax on gas is about 18 cents a gallon, pretty low by international standards.
There is some evidence Europe’s high gas taxes have capped its oil consumption.
Oil use in the United Kingdom has basically stayed flat from 1980 to now, while in France it’s dropped 17%.
In the United States, meanwhile, oil use is up 21% over the same period, although the country has added more people and seen its economy grow slightly faster.
Americans have taken advantage of cheap gas prices to do other things – like buy bigger cars and bigger houses further away from city centers.
On a per capita basis, Americans use three times more oil than Europeans. That means Americans are MORE exposed to rising gas prices than our counterparts across the Atlantic.
“Five-thousand square feet in the suburbs,” is rare in Europe. We dug our own hole.”
Why U.S. Gas Prices Are So Low by Kelly Bowlin is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 International
