Why is gasoline so cheap?

Question

Gasoline is $6 - $8 per gallon in Europe and some Asian countries and only $3 in America. It comes out of the same tanker ships, so obviously we Americans are getting gas cheaper than other countries. (This is also why we squander gas by buying bigger cars than we need.)

Now that some people have answered, I'll tell you the reason: During the oil shocks of the 1970's, the U.S. decided to conserve by directing the auto manufacturers to achieve a "corporate average fuel efficiency". But there was no incentive for us consumers to buy efficient cars. Even worse, trucks were exempted, so now half the vehicles sold in the U.S. are classified as "trucks". In the European and Asian countries, the governments molded the behavior of car-buyers directly by substantial taxes on gasoline. The results are mass-transit systems that are far better than ours and vehicles that achieve far better mileage than ours. Since lots of taxes are generated through fuel purchases, the income taxes can be lowered accordingly.

Thank you, Rainbow Warrior, for the insightful response. I also believe that any American should have the right to drive the very biggest massive vehicle he wants to - except that he should be willing to pay enough money for gasoline that we don't have to send our young men and women to foreign countries to kill and be killed so that we can continue to have cheap gasoline.

Answer 1

We subsidize our oil and gas industries by about $15 billion a year currently. Most people don't connect the dots of where their taxes go... they don't realize income taxes help pay for cheap gas.

Just as some of the post here show, many Americans feel they have a God given right to do what ever they want, regardless of the long term consequences or how a majority might feel. Every man for himself, full speed ahead, science is a joke, it's all about me all the time...

I often wish a had a magic mirror to hold up for some people to see themselves as other do.

You can lead a horse to water, but you can't make him drink.

Answer 2

easy answer.

Because those in Europe and Asia use more mass transportation (trains, busses, etc.) there is less demand. To make a profit, European/Asian oil companies need to sell for a greater price.

Where as in America, almost everyone who can drive will drive. Thus oil companies have a larger market. Since they sell to more people, they can charge less but still make a profit from many sales.

Also our (American) economy is a free market, meaning that the government stays out of the economy and lets private corporations compete for the lowest price.

Simple economics.

p.s., government subsides don't help, they hurt. Instead you pay at the pump and with you taxes. And quite a a lot of those taxes get burned in the bureaucracy.

Answer 3

$3.00 a gallon isn't cheap by any defination sorry. Europe and Asia bay more per gallon because of all the taxes they place on it's sale, they could reduce the prices they pay overnight if they so choose.

As for buying "bigger cars than we need" I'm not aware that anyone decided you had the right to make that determination for me or any other american. If you want to drive a fuel efficient and dangerous compact car by all means please do so. Just don't presume to have the moral authority to decide just how big or small a vehicle I need.

Answer 4

Its not cheap its at the market price. And as others have pointed out that there is an average of $0.46/gal combined state and federal taxes. Or around a 18% tax.

In Europe and other socialist countries they have a majority of people who like you want to decide what other people need and don't need so they have huge taxes on gasoline.

Answer 5

I've never lived in Europe, so take this answer for what it's worth, but IF I remember what I've read correctly, in Europe, gasoline is pretty much taxed out the wazoo... While we in the United States pay something like 26 cents worth of federal tax and another 20 to 40 cents per gallon of state tax, I've read that the taxes in other countries are MUCH higher - Like as much as 50% of the cost per gallon/liter accounts for taxes...

So while we're paying our $3.00 for regular unleaded, with about 46 cents of that being taxes, they're paying $6.00 per gallon with $3.00 of that being taxes.

Answer 6

I believe we subsidize some of our oil production, while Europe does not and may even tax gas!

However, in places like Iran and Venezuela, the government subsidies are so huge that gas is only around $.30 a gallon!

Answer 7

$3.00 ain't cheap! BUT! Go toCanada or for that matter any country where gas is by the liter not the quart and you pay more. I Think the last time I heard, Canada was $1.59 a liter. That's $6.36 for 5 liters which is a little over a gallon U.S.

Answer 8

Europe levies more taxes on motor fuels than we do. They do on everything else, I might add.

Answer 9

Do people in Europe use cars as much?

Answer 10

3 dollars a gallon is far from being cheap.