U.S. versus European Gas Prices

TheDude · Posted: Mon Jun 09, 2008 7:22 pm Post subject: U.S. versus European Gas Prices

cbxer55

I am not really sure I want to know the answer to that last question. Question: Is that the only taxes them folks pay over there? They do not have payroll taxes and such? Everything is paid for by gas taxes? Or is there system more like what is being proposed with this "Fair Tax", only at a lot higher rate?
Guess I am a bonehead! Too many questions, not enough answers.
I always knew they paid a lot more taxes on their fuel, just was not aware it is that much higher!

IanC

This is a very important point to drive home. Yes, Europe pays a lot more at the pump, but they also GET a lot more. My understanding is that much of that 70% of tax goes toward other infrastructure and to subsidize non-auto transportation. Is this correct?

In the US, we just pay more for the privilage (inalienable right) of driving.

-Ian

Peepers · Heavy Crude Joined: Jan 01, 2005 Posts: 213

These comparison of what gas costs here vs. Europe are way too Ameri-centric. When these comparisons are made, they are usually "We pay $4 per gallon here but they pay $9 gallon there."

No they don't. They pay in pounds or euros. When they buy gas, they don't think about how much they'd be paying in dollars anymore than we Americans think about how much we'd be paying for our gas in pounds/euros.

What do they think? The same as us: how much gas costs in relation to other things. We pay $4 for a US gallon of gas? They pay £5 per US gallon (there's 3.78 litres in a US gallon). We pay $4 for a happy meal at McDonald's. They pay £4 for a happy meal at McDonald's. We pay about $4 for a stuffed potato. They pay £4 for a jacket potato (same thing). We pay $5 for a salad. They pay £5 for a salad.

Get the picture?

In other words, they're not paying all that much more for gas than we are. The only time we pay more than they do is when we visit UK/Europe and convert our lowly valued dollar for their currency. Instead, it's all about comparisons with how much other things cost in your daily lives.

TheDude

Well, in all probability it was written by an American for an American audience, what did you expect? Mostly was hoping someone has a cost breakdown of what goes into European fuel taxes. Other commodities are more elastic demand wise, Americans can learn to bake their own bread if it comes to that. And stop eating at Micky D's, that isn't food in the first place.

Found a little piece on Family food expenditures around the world. German family spends the most, then Yanks. Germans still enjoy beer and bottled water I see (was over for a month in '88, great time).

Also found this bit of Anglo-centric news about German prices:

alokin · Intermediate Crude Joined: Aug 24, 2007 Posts: 799

If you fill your car it is greatly unimportant for you if you pay 10 or 70% in taxes - it's what you're paying which hurts you or not.
For the European fuel was always more expensive. The average car consumes less for this reason and I guess that the average European walks lots more.
There is only one thing you could compare: how many working hours needs an average worker for filling the car?

cbxer55

It now takes me 4 hours at $15.00 per hour to fill my 98 Ford Ranger. Same for my wifes 98 Ford Taurus. Both are V-6 and get about 20 mpg. They both have been paid for for a long time, not worth it to trade at this time.

Frank

Factor in the cost of health care (or non-health care) here in the US and Europeans are getting a lot more value! They're a lifetime ahead of us in social programs (some here would argue that this is not good) but I think they're getting a better deal.

hugh-wright · Coal Joined: Aug 27, 2007 Posts: 17

Minimum wage for a 16-17 year old in the UK is £136 for a 40 hour week. Deductions (Income tax & N.I.) leaves about £110 : £2.75/hr.

So the lowest paid full time worker is working 1hr 37min. for a US gallon of unleaded; 1hr 52min for a US gallon of diesel, more or less.

Over 22 yrs old min. wage after deductions is about £4.50/hr : 1hr a gallon unleaded, 1hr 9min. diesel.

Twilight · Expert Joined: Mar 02, 2007 Posts: 2971 Location: UK

Price of Petrol in the UK

Unleaded: 115.0p per litre

Diesel: 127.9p per litre

These are quite typical up to date figures. Stripping out the tax and converting into USD per US gallon at the current exchange rate quoted on BBC, we get:

Unleaded: $3.52

Diesel: $4.33

You can now add whatever taxes are applicable in your state.

I do not think the idea that Europeans have significantly cheaper underlying fuel prices stands up to scrutiny. If we did, the market would bring everything back into equilibrium (after shipping costs) via exports. Such is the market.

Nor do Europeans "pay more" for fuel by paying that tax. Unless you are really wealthy,* you get that tax back, along with much of the 20-40% income tax we pay depending on income and the 15% minimum VAT (17.5% here) in the form of services that people purchase over the counter with hard cash in the US. Such benefits include doctors and university, neither of which I have had to pay for directly.

* Top earners do not get as much value back as they put in. Such is taxation.
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"The American people are watching the numbers climb higher and higher at the pump and they're waiting to see what the Congress will do." - George W Bush

hugh-wright · Coal Joined: Aug 27, 2007 Posts: 17

Well....: go on then.

How long at the minimum wage in your locale to purchase a US gallon? car3

Newfie

Well, if I could figure out how to post a picture it would help.

Here is an article on what it costs in Europe with a table.

http://carscoop.blogspot.com/2008/04/european-gas-prices-and-you-thought-350.html

Bulgaria $6.12
Ireland $7.21
UK $8.24
Netherlands $9.39

*Gas prices were taken on April 18, 2008 by Eurostat and they concern the average cost of one liter of Euro-Super 95 -taxes and duties included. For comparison reasons, we converted Euros/liter prices into Euros/gallon and Dollars/gallon. Note that the exchange rate between the Dollar and the Euro also hit a new record high today (€1 = $1.60 on April 22, 2008).
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hugh-wright · Coal Joined: Aug 27, 2007 Posts: 17

Newfie: How long does someone have to work to buy a gallon of unleaded or diesel where you are?...assuming they are on minimum wage (if there is such a thing) or else whatever is notoriously ill paid: burger flipping perhaps? Smile

Newfie

mos6507

The important thing is how many miles a typical american has to drive compared to a european. By that measure, most americans are "trapped" into buying more gas than the typical european.