04.20.2007

I was looking through the Reuters news items yesterday and came across an article about the prices of gasoline in different countries and how those compare to the extremely low prices charged for a gallon of gas in the United States.

According to the American Automobile Association (AAA), gas is an average $2.86 per gallon (3.785 liters) for regular unleaded in the United States. Reaction in the U.S. to the recent rises in the retail price of gas which drove the average price to the current $2.86 have been all over the place, from a shrug of the shoulders to hysteria and talk of oil-company conspiracies. Some states (e.g., California) have much higher prices due to a more expensive, more environmentally acceptable formulation of the gasoline required by state law. As an example, where I live in Northern California, the average price of gasoline is around $3.59 per gallon of unleaded.

Of course, the price is the U.S. is a pittance compared to what the EU countries pay on average. The AA Motoring Trust has collected price data across the EU, with the following jumping out at you: The United Kingdom, as usual, has the highest price per gallon; petrol costs a staggering $8.37 a gallon, much higher than the next one down. Pity the poor Brit. The Netherlands is next, with the Dutch paying $7.52 a gallon. Then we get to No. 3 on the list, Norway.

Norway is an interesting case. Norway does not have a lot of people, but it has a lot of oil, courtesy of the country’s rich North Sea oilfields. Norway has so much money from selling oil that the treasury has had to establish special cash reserves just to have someplace to park it, as the government is afraid to spend any more money in public works or public benefits in Norway because they’re concerned that more money in the economy will spike inflation. So, you might ask yourself, “Well, if they’ve got that much money and that much oil, then why is gasoline so expensive in Norway?” The answer is simply that Norway has made a decision to keep the price of gasoline high in order to encourage conservation and reduce pollution from cars as well as traffic congestion. People in Norway are not interested in having more cars or SUVs roaming the cities and the countryside, burning more gasoline. Gasoline could be 20 cents a gallon in Norway, but instead it costs more there than every place on Earth, save two. And the citizens of Norway are, for the most part, pretty happy with the arrangement.

Working my way down the list, I finish with the EU, and get to Japan, which is the developed country closest to the United States in terms of the price of a gallon of gas, with a gallon costing $4.16 in The Land of the Rising Sun. Then, a big drop to the $2.86 it costs in the U.S. Then, every other country with a lower retail price than the U.S. is both a developing country and a country that heavily subsidizes the retail price of gasoline. Some examples include Kazakhstan at $2.75 a gallon, Russia at $2.68, Nigeria at $1.92, Saudi Arabia at $0.45, and Venezuela at $0.19 a gallon.

The summing up is this: Wherever you are in the world, if you’re unhappy about the price of gasoline, it could be worse – you could be in the U.K. If you are in the U.K., then, sorry about that remark. If you’re in the States, you have it pretty easy. Probably not much condolence as you’re struggling to fill up your 3-ton, 12 mpg, 7-passenger Lexus LX 470 on your way to the office this morning, but maybe Venezuela or Nigeria is a possibility in terms of emigration. No? Nah, not for me, either. Guess we’ll have to make do.

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