Gas Prices Soaring, Yet Again.

We all feel the pain at the pump, especially when the price start soaring above $4.00 a gallon.  For a fuel centric and car loving country, this hurts, add a major economic recession,  and numerous people are upset.  But lets look at the prices of gasoline her and abroad, comparing American prices with adjustment to inflation, and some of the reasons for the current gas costs and benefits.

First lets compare U.S. prices compared to World prices.  This link here is from summer of 2011 but is a good comparison of gas prices.  Some Examples: (all prices are per gallon)

• Germany - $9.07 --> $4.19 (+ $4.88 in tax)
• France - $9.24 --> $3.84 (+ $5.40 in tax)
• Italy - $8.79 --> $4.05 (+ $4.74 in tax)
• Canada - $4.70 --> $3.50 (+ $1.20 in tax)
• United Kingdom - $8.68 --> $3.47 (+$5.21 in tax)
• United States - $3.96 --> $3.48 (+$0.48 in tax)

So compared to Europe and Canada our fuel prices are bout average.  Where we have a major advantage is in the fuel taxes.  The U.S. has the cheapest taxes on gas, less than half of Canada's fuel taxes and just one/tenth of what Europe pays in taxes.  Now the list, that linked to above, shows a couple countries with gas costing less than a dollar a gallon with no fuel taxes.  These countries though, live in fuel abundant country (like the Middle East), in countries with limited demand, or heavily subdivided by the government.

Next lets compare prices of fuel in America over the years with comparison based on inflation.  This info-graphics are borrowed from this article, read the full article for more about the comparisons.
The is first info-graph shows the price of gas from 1919 to 2011.  Seen this way it looks like prices have skyrocketed but looks are deceiving.

Lets compare prices adjusting for inflation and we see a much different picture.  This first info-graph shows prices adjusted for inflation according to today's dollar.

Or adjusting prices if we had not experienced inflation, using 1919 prices.

Using these info-graphs, we can see our gas prices have actually stayed fairly even in cost.  What we are experiencing currently is raise of prices from the large lows we experienced from 1998-2002.  In fact, fuel prices are only twenty two cents above 1919 prices, adjusted for inflation.


In tomorrows article we will cover the reasons for the increase of fuel prices from the 2000 lows and some of the benefits.