Where gasoline is cheap

And why places like Saudi Arabia, Iran, China and Russia are making it more expensive for you.

NEW YORK (CNNMoney.com) — In Saudi Arabia gasoline costs about 45 cents a gallon. In Iran it’s 33 cents. Venezuelans pay less than a quarter.

These absurdly low prices are a direct result of massive government subsidies.


While these numbers are not adjusted for cost of living, it’s fair to say that drivers in those countries are getting a good deal.

But it’s straining government budgets. More importantly, it’s not allowing the free market to do its job. Higher prices on the open market are not leading to a drop in demand, which is keeping the cost of oil high for everyone else.

“Roughly two-thirds of new oil demand is coming from countries that have subsidized oil markets,” said Christopher Ruppel, a senior geopolitical analyst with the consulting firm John S. Herold. “So demand is not going to be affected if oil goes from $60 a barrel to $80.”

CNN/Money