How much you pay depends on where you live.
And you thought you were paying too much? Even at $4 a gallon, most Europeans envy us Americans. Then again, in some of the OPEC markets, pump prices are so cheap you might get change back on a buck.
There’s no question that fuel costs are rising. The Libyan crisis and the expectation that the global economic recovery will spur oil demand have pushed petroleum futures to more than $120 a barrel on European exchanges. And few expect that trendline to reverse anytime soon.
A typical barrel produces about 42 gallon of gasoline, along with plenty of other distillates. So even when you add in shipping and refining costs – and the industry’s near-record profits – you’d expect to see pump prices of around $3.00 or so a gallon.
So, why is gasoline 160 times more expensive in Istanbul than Caracas? Blame taxes – or credit local incentives.
We Americans might complain about taxes, but compared to most of the world, we get off cheap, state and federal excise taxes averaging just $0.48.1 on gasoline and $0.53.1 on diesel.
In Great Britain, the fuel tax jumped in January to roughly 10 times that figure, the current price of “petrol” in London – adjusted to the U.S. gallon – around $8.17. And that’s by no means the most you could expect to pay if you were cruising around Europe. The highest price you’ll pay among European Union members states is $9.27 an American gallon in Norway, according to a survey by the Cambridge, MA consulting firm, AIRINC.
That’s ironic considering Norway is one of the world’s larger petroleum producers thanks to its vast offshore reserves. But, as with the rest of the EU, its lawmakers have decided to promote fuel efficiency by pushing prices to the extreme. (And it doesn’t hurt, they apparently believe, pumping some more money into state coffers.)
Even then, Norway doesn’t take the crown when it comes to treating oil like the black gold it’s often called. If you’re renting a car in Istanbul be prepared to shell out a lot of Turkish Lira. The going rate at the pump is a head-splitting $9.63 a gallon.
While Norway might have a political agenda that calls for huge fuel taxes, most OPEC members see things quite differently, often subsidizing gas prices to the pump where it’s too cheap to charge – to misuse the old nuclear energy slogan.
Kuwait motorists are currently shelling out just $0.81 a gallon, yet that might seem a rip-off compared to some of its Mideast neighbors. If you’re willing to dodge the bullets you’ll find the pumps set to $0.54 in Libya. And, in the oil-glutted kingdom of Saudi Arabia, it’s just $0.45 a U.S. gallon.
But the biggest bargain you can find is in Venezuela, where the state-controlled oil industry follows the dictates of populist President Hugo Chavez, setting the price at a mere $0.06 a gallon. And, no, that’s not a typo. Fill up the tank in Caracas, reports AIRINC, and you’d likely get change back on an American dollar.