The most common confusion about international gas exchange is that the price for gas is higher in the United States than in other countries. Even taking the exchange rate of the dollar into account, the price-per-gallon of gasoline/petrol is more expensive almost everywhere else in the world.
Making gasoline costs roughly the same regardless of where it’s produced. Whether the nation’s government subsidizes its gas production or heavily taxes it is what makes the difference in the end retail cost. The main factor here being the differences in government policies.
In many European nations, as much as 75% of the cost of gasoline is made up of taxes. While in countries such as Venezuela and Saudi Arabia the government owns the oil-production company and keeps the local prices low as a benefit to their citizens.
The relatively low gas taxes in the U.S. make it hard for Americans, as their gas prices tend to climb over 200% in a very short amount of time. Lower prices also encourage us to fall into a cycle of buying bigger, less fuel-efficient cars, while living further away from where we work. This leaves us more susceptible to ever-rising prices. The U.S. does pay more in relative terms, considering the lack of social services the taxes might be used to finance. Though they pay nearly the highest price-per-gallon, Europe’s stronger social structure, including affordable health care and higher education is partly paid for by the higher taxes they pay on gasoline.
Standard of Living
The difference in salaries and exchange rates in different countries, the varying distances that people travel vs. the average mpg of their vehicles, and the public transportation available need to all be considered in the overall equation.
The next time you feel the pinch as you hand out $3.45 per gallon, keep in mind that they’re paying nearly $10 for that same gallon in Eritrea and just over $8 in France. In fact, the U.S. is merely #108 of the 155 most expensive countries to buy gas.