Be informed the next time you discuss gas prices.
U.S. gas prices have been the topic of discussion in the news, during political races, and at home. Americans as a culture are dependent on gasoline and oil, and it does not go unnoticed when the price at the pump increases. Although it may seem like Americans pay exorbitant prices at the pump, some surprising comparisons may help put the price of a gallon of gas into perspective.
Many factors determine the price of a gallon of gas. According to the Energy Information Administration (EIA), there are four factors that affect the retail price of a gallon of gas. These four factors are:
In addition to the federal and state taxes, there may also be local and county taxes that impact the gas price by region.
As Americans become increasingly irritated with the cost of gas, it is important to reflect on what some other countries are paying. According to the EIA, the United States does not pay the highest price for a gallon of gas. The U.S. Department of Energy (DOE) tracks weekly gas prices (all converted to gallons and U.S. dollars) for six other countries besides the United States. For example, during the first week of June 2008, the United States paid an average of $4.20 per gallon. The United Kingdom came in with the second cheapest price at $8.74 per gallon. Belgium paid $9.20 per gallon, France paid $8.80, Germany and Italy were tied at $8.93 and the Netherlands paid the most at $9.89 per gallon. In fact, the United Kingdom was paying $11.00 per gallon in May 2008, just a month prior, which prompted a large trucking protest over exorbitant fuel prices.
The DOE also runs a weekly price chart showing the prices for various regions within the United States. It should also be noted that there are many other countries that pay significantly less for gasoline. Saudi Arabia, Kuwait, Egypt, Nigeria and Venezuela were all paying less than $1.00 per gallon in 2005, with Venezuela natives paying only $0.12 per gallon.
Although gas prices are on the rise, it is important to keep perspective on the prices of everyday consumables as well. For example, the price of a gallon of milk was comparable to a gallon of gas in June 2007, around $3.19 per gallon. Web sites such as Cockeyed.com and Swivel offer comparisons to many different liquids on a per gallon basis. Putting this into perspective, gas is one of the least expensive liquids purchased. For example, the cost of a gallon of house paint ($16.50), a gallon of Red Bull Energy Drink ($30.69) and a gallon of vanilla extract ($127.84) are all far more expensive than the price of gasoline in the United States today.