Why Gas Prices?

Why are the United States gasoline prices not rising at the rate of the rest of the world?

Key in on since 2002 especially. Can anyone explain this odd behavior?

Wow, you lucky Americans... /ubbthreads/images/graemlins/wink.gif

BTW, the French price is the highest because thr road taxes are incorporated, unlike the other countries. /ubbthreads/images/graemlins/wink.gif

Another thing (often seen on news article graphs) is that this graph does not start at 0 on the bottom. Redrawing it so it starts at 0 will give a better idea of the relative dynamic behavior of US and other country's prices.

The gap in prices is largely due to more gas taxes almost everywhere else in the world except the US, I think.

Tax, thats why.

Also, when government taxes are calculated as a percentage of base gasoline price (like 200%), then rising gas prices mean rising revenue for the government, and they are not that motivated to limit gas price rise. If tax is a fixed increment over cost (like $1 per gallon), then governments might better understand the pain of higher gas prices on their populace since it isn't offset by more revenue for government.

Here is from zero as you asked for:

I agree with the tax. I believe someone told me in england it was like 5 bucks a gallon cause of tax, other wise gas in england would run 75 cents a gallon.

Gasoline State Tax (added to price before you even buy it)

In Oregon is 24% (but Oregon has no Sales Tax)
In Texas it is 20%
In Rhode Island it is 30%
In Georgia it is 7.5%

http://www.eere.energy.gov/vehiclesandfuels/facts/2004/fcvt_fotw317.shtml

Federal Excise Tax on Gasoline:
1990: 9.1 cents
1996: 18.3 cents
1997: 18.4 cents
2002: 18.4 cents

http://www.taxfoundation.org/exciseratesfed.html

Base 0 chart sort of shows EU gas prices are about 2.5 times US prices, more or less. Again, probably due to higher taxes...

[ QUOTE ]
cobb said:
I agree with the tax. I believe someone told me in england it was like 5 bucks a gallon cause of tax, other wise gas in england would run 75 cents a gallon.

[/ QUOTE ]

Try nearer to $8 a gallon. /ubbthreads/images/graemlins/rant.gif

8? Then again you guys have cooler cars with better mpg. I think someone told me any engine size over 1600ccs was considered too big.

Some countries like England and Canada use the gas tax to support socialized medicine. If the congress ever decides to go that route (medical care for everyone) our gas will go up as high as theirs and all the big V8s will vanish as people end up paying 3 times as much for gas.

It costs me about US$43 to fill my Plymouth Voyager.

If you want a really interesting graph, try plotting it in constant euro - this really shows the real culprit in US prices rising at all - dollar devaluation.

Everything said about taxes is true, but does not explain why the rate of increase was less in the US during 2 key price increases in that graph. I believe the answer is the US Strategic Oil Reserve. The US Government maintains a huge underground reservoir of crude oil for emergencies such as war so our ships and battle tanks can keep running no matter what. This reserve has ocassionally been tapped during sharp oil price increases to stabilize the US oil market. The oil is only released into the US market, so it provides much more price stability nationally than globally. However, the big oil companies love high oil prices, so there is a certain amount of political pressure not to do this. If the US economy cannot stand the load of higher oil prices, it is more likely that the government will intervene.

Ours is getting high enough thank you very much!

Diesel at a place I often buy was $2.03.9 today.

A LOT of the problem is production capability. Very few new refineries have been built in 20 years. The ones we have are running hard! Then the Hurricanes MESSED UP Gulf of Mexico procurement!

We can't drill in Alaska because some animal might have to move a mile or so.

Lord help us if we ever get gas prices like Europe!! Then EVERYTHING would cost a WHOLE LOT more!!!

But yeah, since we aren't being taxed for healthcare and other stuff that has very damm little to do with driving, we pay less here in the good old USA! And for that I am grateful!

Great question, Newbie. As Lurker just pointed out, the question you asked confused some of the folks here. The question wasn't why the gap in prices, but why the gap in price *increase* recently. Oil costs more per barrel now than ever before in history. Lots more. Yet our gas prices are the same today as they were a while back when oil was $20 less/barrel. What gives?

This has NOTHING to do with the taxes that other countries pay. Has something to do with what is going on domestically - and I haven't a clue what that is. I think we'd know about it if the strategic reserve were being used.

I also heard of a strike in nigeria which is an oil producing nation didn't help any.

Several reasons have been noted in this thread and hera are a couple of more:
One = Production.
The US has a significant amount of oil production that is "expensive". When the worldwide price of oil rises these "expensive" wells become practical to pump. This brings more oil onto the market when the price rises. That causes a leveling of the US domestic oil price.

Two = Volume
The US is far and away the largest consumer of oil. This allows the US companies to buy and sell oil at prices which are effectively discounted. Example: The US moves more oil so it becomes cheaper to move each barrel.

And Three: George Bush is actually a member of House of Saud /ubbthreads/images/graemlins/smile.gif.

A barrel of oil in 1980 got up to 37.00.

What cost $37 in 1980 would cost $89.44 in 2003.

The calculator is here:
http://www.westegg.com/inflation/