[sventvkg]

I know that our industry is heavily substidised, oil is bought worldwide in Dollars, but I would like to know the specifics of our much cheaper gas prices then other western nations. I want to make sure I can explain this correctly to other people. Thank you!

[pup55]

Pretty simple, really.

Wholesale unleaded gas price is about $1.50 per gallon at the moment
Gas taxes at the pump are about .40 to .50 per gallon. These include local sales taxes, federal highway taxes, state highway taxes, and so on. These vary from state to state.

This gets us up to about $2 per gallon, or about .50 US per liter give or take.

Next comes transportation and any profit for the gas station itself who is doing the selling. This is dependent on where the gas station is, and who is running it. Transportation is a couple of cents, maybe 5 at the most, the rest goes for the operating costs for the gas station. Maybe this is another .15 or .20 per gallon.

So, at $2.20 per gallon, this is $.55 per liter.

I cannot believe it is that much different in cost to run a gas station in Europe compared to the US. In my experience, gas stations in Europe are quite similar to those in the US. Gasoline is a globally traded commodity so it is the same price everywhere, except for this issue of transportation.

So, the apparent reason is, the US has a lot lower taxes on gasoline than Europe. If you want, you can blame this on the unenlightened US Federal and Local governments, who are really reluctant to increase taxes on gas in order to support the auto industry and promote the general culture of car use in the country.

Seems suicidal, I know, but that's the way it is. In the recent elections, the winning side actually ridiculed their opposition at one point for even suggesting that people ought to carpool to conserve fuel, and that fuel taxes should be higher.

[EnemyCombatant]

I've lived in eastern europe. And gas prices are an issue.
Cars come standard WITHOUT air conditioning. They are all tiny fuel efficient stick shifts. Not too many automatics.

Even when the upper class purchases their mercedes or bmw, they will get some thing like a 325 model. No SUVs at all. A few RAV4s.

But again, public transporation is effective. We lived in Budapest without a car and we occasionaly rode on a moped. There are lots of mopeds there. That's a popular way to commute despite the weather. The buses go down almost every side street. The buses and trams run on electricity.

It was the same in other east european countries. I can't speak for western europe.

[aahala]

With the rapid changes in prices, this page is a bit dated,
but take a look at Venezuela!

http://www.marginalrevolution.com/margi ... _arou.html

I think it was about a year ago I ran across the actual pump price in Venezuela, it was something like 14 cents a gallon.

[Kingcoal]

Compare the US to Australia or Canada, etc, but don't compare it to Europe. European countries have many more people per land area than the countries listed above. This produces different policies.

The US has no real culture to preserve, on the contrary, people like new things - new houses, new cars, new shopping malls, etc. Europe in contrast, is in awe of it's past. Not many things are torn down. Just about everything is rebuilt. Most Europeans I've met are shocked at the utter contempt that many Americans seem to have towards their old architecture. Europe preserves, even idolizes its oldness. That means curbing suburbia severely. Since most European countries compare in size to a medium sized US State, such as New York, they need a lot of their available open land for farming. The USA has no shortage of farmland.

North America and Australia are lands of wide open spaces. It doesn't take to long, driving in any direction, to get to 1 person per square mile. After WW2, the US set about trying to fill its countryside and empty out its cities. It should come as no surprise that GM and the Standard Oil offspring were right behind these policies. These policies produced growth. In the US today, it's not uncommon for a person to drive 100 miles round trip to work. In the beginning, it was a fantasy come true for many, as they were now able to afford one of these new houses with back yards, in the suburbs. A developer named Levit, built two communities, one outside of Philly and one outside NYC, which are generally considered to be the suburb-prototypes.

What this produced was decentralization. People at first kept their jobs in the city and commuted from the suburbs. Employers, fleeing skyrocketing taxes, moved out of cities in droves to bring us to today where most all suburbanites commute to their job somewhere else outside of the city. The USA has cities chock full of poor people, many of whom don't work. The suburbs on the other hand are emptying out for the deeper suburbs and the process continues. Levittown outside of Philly, one of the very first suburbs, is a rough place. I don't mean to insult the bikers that live there, but I definitely check my car locks when I go there.

Since North America and Australia are decentralized, they need to keep gas cheap so that their economies will continue to grow. In Europe, in comparison, everything is controlled. The government needs lots of money to build and maintain infrastructure. The result is a generally more efficient lifestyle, but a slow growth economy.

[Tyler_JC]

Well put.

My dad used to live in the Levittown outside of NYC. It was a dream come true for his family. My grandmother didn't have to work and they were able to afford a car. My grandfather worked very hard in a factory and was able to support a wife, 3 kids, and a house in the suburbs. Everyone in the 40's, 50's, and 60's wanted this and in most cases, could get it (if you were white). The cities emptied out and the people moved to Suburbia.

Something happened in the 70's that changed everything. The cost of living started going up faster than wages. The environment started failing to keep up with industrial expansion. Inflation pushed millions of people into the higher tax brackets. The Middle Class started to hurt. The American Dream was fading from view.

The solution was simple, make mom work. Suddenly both parents had to work in order to live the way that their parents did. Industry was moved overseas in order to keep prices down. The savings rate fell for 20 years to almost 0%. Debt levels soared. The money supply increased like crazy. The stock market entered a 15-year+ bull market...and gas was cheap.

What most people missed during this period of time was the energy factor. Energy was cheap in America's Golden Years (1946-1969). American oil production peaked and energy started getting costly. OPEC started pushing us around. Rather than fix the core problem, we imported the difference. We won't be able to do that in the future. The new energy isn't going to be there. The American Dream will become impossible for the average person. The cities will become crowded again as the mass-exodus from Suburbia begins.

Unfortunately, the cities won't have jobs for these immigrants. The Suburbanites will stay untill the government shuts down. At that point, the second round of city-leaving will begin. These people will have no where to go. Suburbia will have to be demolished to make room for farms. Hundreds of millions will lose everything. Tens of millions won't survive the transition.

Sorry to write a rambling summary of The End Of Suburbia.

Your question was about gas prices being cheaper in the USA? Easy answer, taxes. Gas taxes are MUCH higher in Europe. That's why gas is $6 a gallon in Paris, France and gas is $2 a gallon in Paris, Tennessee.