With gasoline prices rising relentlessly here in the U.S., Joseph in California is wondering whether drivers in other countries are feeling the same pain at the pump that he is. It turns out American drivers aren't seeing the worst of it. But they're also not enjoying the kind of energy bargains available in some parts of the world.
I would be curious to know how other countries are faring with the run-up on gas prices. Are they being exposed to the same price shock that Americans are experiencing right now?
Joseph M., Linden, Calif.
Gasoline prices are going up around the world, but the pain is not being felt everywhere the same way. Drivers in some countries pay a lot more than U.S. consumers. But others pay substantially less. That’s because pump prices don’t reflect just the cost of gasoline.
In most of the industrialized world, including Europe and Japan, pump prices are much higher than in the U.S. – even though the wholesale price is roughly the same. The difference is a heavy tax load those countries impose to discourage consumption.
The Dutch have the dubious distinction of paying the most to fill 'er up, according to the U.S. Deptatment of Energy. (There are various agencies that track gasoline prices, but these are among the most recent figures available.) As of April 10, drivers in the Netherlands were paying the equivalent of about $6.73 a gallon at the pump. The gas itself cost $2.61; the rest — $4.12 — represented tax. That’s a 158 percent tax. By comparison, the U.S. has the lowest tax on gasoline of any industrialized country: about 15 percent at current prices.
Elsewhere in the industrialized world, the actual cost of gasoline ranges from $2.15 a gallon (France) to $2.61 in the Netherlands. But the after-tax price is $5.80 in France and over $6 a gallon in most other major European countries. Japanese drivers get off relatively easy: taxes there only push pump prices to about $4.50 a gallon.
So much for Europe and Japan. In less-developed parts of the world, some countries actually subsidize pump prices to keep them below what the gasoline actually costs to make. China, which recently raised fuel prices, still keeps them well below international market rates. Chinese drivers — and farmers — still pay the equivalent of less than $2 a gallon. As a result, the oil refining industry there is losing billions of dollars. That’s why the Chinese government is expected to continue to try to raise retail prices, while trying to avoid a major consumer backlash.
The cheapest places to top off, not surprisingly, are in countries that produce the most oil. In Iraq, until recently, pump prices were capped at 10 cents a gallon. Prices have recently risen to nearly 40 cents a gallon — still a bargain compared to the U.S. Iran also keeps pump prices low — less than 35 cents a gallon, according to a recent Reuters survey.
But for a real bargain, drive on down to Venezuela, where President Hugo Chavez has made a name for himself lately by delivering heating fuel to low-income American families at bargain prices. In Venezuela, you’ll pay just 12 cents a gallon to fill your tank.
