My girlfriend and I are thinking of taking a vacation in Portugal and found out some interesting info on gasoline. As we live in Canada, I have tried to compare prices in canadian dollars:
Gas in Canada about .80 per litre
Gas in US about 3.00 per us gallon
Gas in Europe about 4.00 per litre
( to figure costs in US dollars, multiply these figures by 2/3 )
-The cost of crude almost anywhere in the world is about $ 30. US per barrel, therefore the raw supply costs do not effect the gas price.
-The cost of building a refinery would be about the same all over the world, as materials are sourced world wide. Most refineries are built near ocean ports, which means costs of landed components are about the same everywhere. Cost of money to build these plants is from international souces, and therefore cannot be a cause of price difference in gas.
-In europe the population density is greater than north america, which should reduce the distribution costs, but in actuality gasoline is about 4 - 5 times that of north america
My question is why the great disparity between north america and europe.
Is it that the european governments are taking 90% of the pump price vs north american at just under 50% ?
Or is it that north american prices are being kept artifically low, and governments in north america fear our pump prices going up to european levels, and that this is in some way connected with the Iraq war ?
I think the main reason is the level of taxation imposed by the various governments. I know that the UK taxes are a very high percentage of the pump price. It does vary country by country and across different fuels. For instance in France diesel is much cheaper than gasoline.This is ( I think ) because the French government does not want any trouble from the truck drivers. BTW I have just returned from a week’s holiday in Portugal and I found the road system quite good and, in spite of Purtugese drivers supposed to be the worst in Europe , getting around was no trouble. The drivers must have been on their best behavior last week!.
Eurape taxes it higher and has no local stocks. The North American government does not have any unusual aid to the oil industry, although it does cooperate on opening oil supplies on federal land (of which there is a lot) at times.
There are local stocks in Europe. The North Sea is full of the stuff (and natural gas). Just fly over the sea and see how many rigs there are. Brent crude is named after one of the oil field in the North Sea.
Where did that price of $3.00 per gallon come from? It got as high as $1.68 here in Mississippi, but has gone down 10 cents or more in the last week. On the few trips we have taken to Europe the cost of gas did not seem bad since distances are so much shorter in Europe. Tomorrow, I’m going to drive to Houston, TX and it will cost something like $65/$75. I probably would not be doing it, if it were at European gas prices.
In France gas is almost 4 times more expensive than in the US, like laundryman stated.
It is all taxes… Gas has taxes ON taxes in France… Anything the goverment can do to get money, they’ll do.
So yes, it is all because of various taxes.
Don’t know where you got your figures from, laundryman, but a litre of “gas” does not cost anything like $4.00 in Europe. It costs about 1 euro, or $1.60 Canadian.
“The North American government does not have any unusual aid to the oil industry, although it does cooperate on opening oil supplies on federal land (of which there is a lot) at times.”
This is not true, the reason gas prices are so low in the US is because of massive subsidies to oil companies, amounting to billions of dollars a year. (estimates range wildly, but $20 billion a year is a conservative estimate) If not for these subsidies, gas would be much more expensive. These subsidies run against the very idea of a free market, and distort the apparent cost of energy.
This topic has been covered several times before. See this thread.
This is what I said last time: This handy site from Shell Oil gives a table comparing pre and post tax petrol (gasoline to you Merkins) prices worldwide (note: the figures are in Australian dollars).
It is very clear from that graph that the differences in prices are almost completely due to differences in taxes.
Australia has the cheapest pre-tax petrol in the world. Australia also has the cheapest post-tax petrol in the OECD, closely followed by the US and New Zealand.
Sorry that link doesn’t go directly to the graph and I can’t get it to do so. When you open the link, simply click on the ‘World’ icon under the options heading and you will be taken straight to the graph.
Relatively none. Most nations have no indigenous stock.
Also, as I said, the gov has no unusual aid to the oil business. Given the huge value of the business as a whole, $20 Billion actually is a drop in the bucket (pun!).