Gasoline and diesel usage and pricing

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This article or section deals primarily with the United States and does not represent a worldwide view of the subject. Please improve this article or discuss the issue on the talk page.

Example from Germany 2007, 1.319 €/L=US$7.65/gal

Average gasoline prices around the world, May 2008. Brighter-coloured countries have more expensive gasoline.

The usage and pricing of gasoline (petrol) results from factors as crude oil prices, processing and distribution costs, local demand, the strength of local currencies, and the availability of local sources of gasoline. Since fuels are traded worldwide the trade prices are similar, the price paid by consumers largely reflects national pricing policy: some regions, such as Europe and Japan, impose high taxes on gasoline; others, such as Saudi Arabia and Venezuela, subsidise the cost.^[1]

Western countries have among the highest usage rates of gasoline per person. The largest consumer of gasoline in the world is the United States, which used an average of 386 million US gallons (1.46 gigalitres) of gasoline each day in 2005.

[edit] Gasoline usage and pricing in the United States

Despite high demand in the country and despite rising fuel costs, gasoline prices are low in the United States when compared with most other Western countries. In May of 2008, gasoline prices in the United States were US$1.04/litre (US$3.93 per US gallon). As of June 7th, 2008 average prices exceeded $4 per gallon ($1.056 per litre).

Transportation amounts to 44% of the total US consumption of petroleum products.^[2] This corresponds to 18.5 Exajoules per year, or 600 Gigawatts. According to national figures from the US Department of Energy in March 2007, 52% of the cost of gasoline went to pay for crude oil, 24% for refining, 15% to taxes, and 9% for distribution and marketing.^[3]

Long-term US gasoline prices, 1990-2007 (adjusted for inflation using the US CPI).

[edit] Gasoline usage and pricing in Europe

Most European countries have high fuel taxes. The prices have traditionally been 3-4 times the price in the United States, with prices for example during the years 2000-2005 of €1/litre (about US$1.54/l or $5.82/gal) while the US had prices around $1.50/gal or $0.40/l. This has been the case for many years, and has not caused many protests. In fact there has been more fuel price protests in the US.^{[citation needed]} In year 2007-2008 the market price before taxes have risen, making gasoline expensive everywhere, but Europe still has more than double the US price. Russia and some neighboring countries have much less tax, with gasoline prices more like the US.^{[citation needed]}

[edit] Countries with subsidised gasoline

A number of countries subsidise the cost of gasoline and other petroleum products. Subsidies make transport of people and goods cheaper, but discourage fuel efficiency. In some countries, the soaring cost of crude oil since 2003 has led to these subsidies being cut, causing inflation and political unrest.

Fuel subsidies are common in oil-rich countries. Venezuela, which has vast oil reserves, maintains a price of Bs.F 0.097 per litre (around US$0.05), and has done so since 1998. [2] Other countries with subsidised fuel include Iran, Saudi Arabia, Egypt, Burma, Malaysia, Kuwait, India, China, Taiwan, South Korea, Trinidad and Tobago, Brunei and Nigeria. The Australian state of Queensland also subsidises fuel at the rate of A$0.08354 per litre [3].

[edit] Malaysia

Malaysia spends to the tune of US$14 billion subsidising gasoline, diesel and gas at present each year. ^[4]Effective June, 5th 2008 gasoline prices increase by 40% to $3.30 a gallon(3.78 litres), from $2.32 a gallon. Diesel prices rise by $1.22 to $3.04 per gallon, a 67% increase. It was announced that price increases were planned to bring fuel prices in line with global market cost, suggesting that it may hit $3.80 per gallon by August. The Malaysian government has also announced to give a yearly cash rebate of $201 per year to owners of cars with an engine capacity of 2,000 cc or less to offset their burden from the massive hike.^[5] The government introduced a temporary ban and then the temporary ban was suspended after the price increased on the June 7th 2008. For one or two days, not allowing to buy fuel within 50km of the country border has been lifted in accordance to the fuel prices increase. After a 41-percent hike in petrol prices (41 percent to MYR2.70 ringgit ($0.833) a liter and diesel 63 percent to MYR2.58) by the government that ban has been lifted.^[6]

[edit] Indonesia

In March 2005, Indonesia increased the price of gasoline and diesel by 29%, causing widespread protests. The price of gasoline was raised from Rp 1800 per litre (around US$0.20) to Rp 2400 per litre, while diesel rose from Rp 1650 to Rp 2100 rupiah. Prices were increased again in October to Rp 4500 a litre, an 87.5% rise, for gasoline, while diesel was increased to Rp 4300, and kerosene, used for cooking, increased from Rp 700 to Rp 2000 per litre. The price increases came as oil prices threatened to increase the government's oil subsidy to $14 billion per year, and caused further protests.

With oil reaching over $130 a barrel, Indonesia further increased prices on May 24 2008, to Rp 6000 ( approx. $.65), and diesel to Rp 5500 ( approx. $.59), while kerosene was raised to Rp 2500 ( approx. $.28), moves which caused widespread protests.[4] In addition, it was suggested that private car owners, who Indonesian terms are wealthy, would eventually be excluded from subsidies entirely, with the cheap fuel limited to public transport and motorcycles.

People have been encouraged to switch to LPG for cooking, as Indonesia is the world's largest exporter, whereas its oil industry is in decline, and it is now a net importer.

[edit] Average gasoline prices around the world

See fuel tax for tax information by country.

The German Technical Cooperation (GTZ) has published a list of worldwide gasoline prices by country every year since 1991. The results for 2007 can be seen on page 96 and 97 of this document

[edit] See also

• Gasoline price website
• Zone pricing

[edit] References

"XE.com - The World's Favorite Currency and Foreign Exchange Site". Euro to U.S. dollar conversions. Other currency conversions, too.

[edit] External links

• GTZ International Fuel Prices 2007