OUR THOUGHTS ON:

Gas Prices: It Could Be Worse

Energy & Resources

By Amy Kletch

As the summer vacation season gets underway, many travelers will complain about the price of gas, currently at $3.55 per gallon. Government subsidies allow consumers in the U.S. to pay anywhere from $0.90 to $2.00 less per gallon than the actual market value. Compared to the prices paid by residents of other countries, U.S. gas prices do not seem so bad.

In Turkey, gasoline prices are $9.98 at the pump as a result of approximately 40% of that nation’s workforce not paying taxes due to under-the-table employment. Therefore, the fuel tax is an important source of governmental revenue, since it is easier to enforce.

Although Norway is a major oil-producing country, the average Norwegian pays $9.97 for a gallon of gas. This is because oil profits are used to fund free college education and infrastructure development, instead of subsidizing gas at the pump.

In most European countries, gasoline prices are between $6.00 and $10.00 per gallon higher than in the U.S.

When making the comparison between U.S. gas prices and prices in other countries, keep in mind the per capita income of residents. For example, in India, gas prices average $4.36 per gallon. On the surface the prices appear comparable. However, per capita income in India is much lower than in the U.S. Given this consideration in making the comparison, the cost of a gallon of gas in India is approximately 16% more than the average worker earns in a day, while the average price per gallon in the U.S. is less than half of the federal minimum wage for one hour of work.

As you begin your summer travels, and with the uncertainty of Egypt’s political situation possibly affecting gas prices, remember it could be worse.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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