Americans have gotten use to low prices for a gallon of gas, and now are complaining due to price increases. A study by AIRNIC, reported on CNNMoney.com, shows that the price of gallon of gasoline in the US is the 45th cheapest out of 155 countries surveyed.
The CNNMoney article explains that '(c)omparing gas prices across nations is always difficult. For starters, the AIRINC numbers don't take into account different salaries in different countries, or the different exchange rates. The dollar has lost considerable ground to the euro recently. Because oil is priced in dollars, rising oil prices aren't as hard on people paying with currencies which are stronger than the dollar, as they can essentially buy more oil with their money as the dollar falls in value.'
The price to produce gasoline is fairly consistent no matter what country it is produced in. The biggest reason for the higher cost is due to the amount of taxation placed on each gallon (or liter) sold. The US actually on charges on average .18 cents in taxes on each gallon, one of the lowest tax rates in the world. In France, almost 70% of the price of gasoline is taxes.
US Implications
In the US, the by-product of cheap gasoline is the current status of urban/suburban development. The US has built-up suburban areas of cheap houses far away from other uses forcing Americans to drive their car just to get groceries. This mode of development has exacerbated the current increases to gasoline prices.
Today, the US released data on consumer spending which increased 0.4% from the prior month. However if inflation is taken into account, the increase was only 0.1%. Inflation edged up 0.3% month over month, inpart due to increases in oil and fuel prices.
Larger Implications
The US uses 20.6 million barrels of oil a day. China, the next biggest consumer, uses 7.2 million barrels of oil a day. The US has approximately 303 million people. China has 1,330 million people. If the Chinese ever approach the oil consumption of the US, they could use almost 88 million barrels a day. If we add in India, which has a population of 1,147 million people, they would use almost 76 million barrels of oil a day. Using back of the napkin math, there could be a future demand of almost 200 million barrels of oil just from these biggest users. The current production levels for the world is 84.6 million barrels.
Granted, the assumptions from the paragraph above are not a rigorous analysis but it does indicate that energy sources will become increasingly important in the future.
Source:
'U.S. Gas: So Cheap it Hurts', by Steve Hargreaves, CNNMoney.com
'Consumer Spending Stagnates as Prices Rise', by Michael M Grybaum, NY Times
'The World Factbook' Central Intellegence Agency
'World Oil Balance', Energy Information Administration
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