High gas prices crippling European growth
Or so says Andris Piebalgs, the European Union’s energy commissioner. Gas prices in Europe are
currently at the equivalent of $6.62/gallon, more than twice the average price of a gallon of go-juice in the U.S.
Imagine paying $72.82 to fill your 11-gallon gas tank, or how about $125 to fill your 20-gallon tank? Though we in the
U.S. cry foul at $3/gallon gas, Europeans can only remember with envy those days when fuel didn’t cost a
day’s wage. Meanwhile fuel-dependant companies are passing the extra costs right down the line to consumers.One interesting note is that taxes comprise 66% of the cost of fuel in Europe. As of 2005 gas in the U.S. carried with it federal, state and local taxes that ranged anywhere from 32.9 cents to 62.9 cents per gallon. New York’s combined gas tax is the highest in the nation at near 63 cents/gallon, which means at last week’s price of $2.914/gallon about 29%, or less than half the amount of taxes Europeans pay, went to the government.
Reader Comments (Page 1 of 3)
Ryan S. 12:14PM (5/01/2006)
I have no sympathy, the FAR majority of there gas prices are taxes, it's to some degree self inflicted.
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Noah 12:17PM (5/01/2006)
Not to be unsympathetic but they don't have to drive as far for most things. Not all people in the EU but most... Not to mention their cars actually use less gas, gosh seems like a smart group of people to me... use more efficient cars and drive less? Ok every one in north america is going to move to Texas and we can experiance the same thing!
--Noah
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Tommeh 12:29PM (5/01/2006)
Yeah, too bad America isn't way smaller in land area. That'd solve everything.
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B 12:42PM (5/01/2006)
Gas is much higher in Europe but CAFE standards are almost double the US. So, effectively, the consumer in Europe is likely spending little more on gas than we are. It it is crippling growth in Europe, it is doing so in the US.
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doug 12:55PM (5/01/2006)
The EU has about 457m people and uses 14.5m barrels of oil per day
The US has 295m people and uses 19.6m barrels of oil per day.
Those gas taxes go to support the health care/unemployment benefits they get.
I think our economy will respond better to higher gas prices than the EU's will because we have a more capitalistic economy than they do. Americans are more willing to change in response to circumstances than the Europeans seem to be. So we will conserve, buy smaller cars etc, but it will be because we see it as in our best interests, not because of gov't mandate.
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SOhp101 12:58PM (5/01/2006)
agree with #1. It's all taxes. Well, 50% of the cost of gas in Europe that is.
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Hank 1:15PM (5/01/2006)
#1 is correct, and any story that bemoans EU fuel prices w/out mention of the % of taxes in the price is highly inaccurate and can be very misleading.
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Gary 1:20PM (5/01/2006)
The mass transportation Nazis are all throwing a party right about now over there.
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blazze 1:50PM (5/01/2006)
Yeah you know waht they pay in Canada. $1.09 Can you freaking belive it. I know it's becuase they produce oil, and we import some. It's starting to make less and less since to me why we pay more and other countries pay less. Like England $7.10 a gallon $5.00 tax on every gallon. $2.10 a Gallon. And yet we're paying $3.00. All this talk about Iraq being the reason, is also some crap. All they need to do is buy more from The Americans( this includes Mexico, Venezeula and Canada.)
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Matt 2:00PM (5/01/2006)
Recently, there was posted a pair of essays written by economics types relating to the topic:
http://www.becker-posner-blog.com/
I agree with Posner. Taxes on fossil fuels in the US are too low. The lobbying is too strong. I would like nothing better to see incentives to ship via truck disappear, as I believe these vehicles are a horrible part of our daily life. Why aren't we using rail for shipping? Why are our trains so technologically behind? No incentive to use them! Gas is too cheap!
I would also like to see fewer billboards, but that's another discussion I guess (although related to driving - less driving equals less incentive to make billboards).
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Marcello Mastroianni 2:05PM (5/01/2006)
> The mass transportation Nazis are
> all throwing a party right about
> now over there.
Nazis? Yeesh, man, lay off the crackpipe!
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all_that 2:09PM (5/01/2006)
The gas tax isn't even the whole story. Policies vary widely by country, but cars in many places are taxed on either output (horsepower, CV, whatever you want to call it) and/or engine displacement at annual registration. So...you get taxed heavily for buying "too much car" (basically a luxury tax) and then again when buying fuel. This is an unfortunate cost of more socialistic society.
In France, for example, diesel is encouraged by the gov't, so it's cheaper per liter due to less tax. They also tax cars (at registration/renewal) on output instead of displacement. The interesting result is that torque-biased diesels offer more performance bang for the tax buck, get better range from the volume of fuel and use fuel that costs less. This is why cars like the Peugeot 206 with the 2.0L HDI powertrain and Renault's 2.2 dCI-powered small cars have been very popular. These are basically each company's "big" diesel - usually developed for larger cars - shoved into smaller cars.
Yes, it's gov't meddeling and it's much less of a free market than the US; but it's interesting that companies and consumers find creative ways to keep things fun...
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all_that 2:15PM (5/01/2006)
"Why aren't we using rail for shipping?"
We are, but can you imagine a world with rail access to every grocery store, car dealer, appliance store...well, basically every retail entity? Perhaps more rail could be used in leiu of some of teh "cross-country" trucking, but you can't really use it as a repalcement for all the in-city transport, and that's a lot of what you see.
Also, I doubt the current rail system would support replacing all current cross-country trucking; so you'd need more railways. Many people would probably support it on a theoretical level right up until it got close to them. This would be a major NIMBY (Not In My Back Yard) syndrome issue.
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John Smith 2:16PM (5/01/2006)
LISTEN TO THIS CLOWN:
9. Recently, there was posted a pair of essays written by economics types relating to the topic:
http://www.becker-posner-blog.com/
I agree with Posner. Taxes on fossil fuels in the US are too low. The lobbying is too strong. I would like nothing better to see incentives to ship via truck disappear, as I believe these vehicles are a horrible part of our daily life. Why aren't we using rail for shipping? Why are our trains so technologically behind? No incentive to use them! Gas is too cheap!
I would also like to see fewer billboards, but that's another discussion I guess (although related to driving - less driving equals less incentive to make billboards).
----
Now, let us school him:
Sir, MOST OF OUR (AMERICAN) FREIGHT GOES BY RAIL!!!
It is EUROPE that ships the MAJORITY of their freight by TRUCK!!
(But you must be one of those people who thinks that everything in Europe is better and so you used your handy stereoptypes of Europe to try to smear the United States again.)
Well, I am happy to have smashed that stereotype.
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John Smith 2:23PM (5/01/2006)
Once more, "Why aren't we using rail for shipping?"
The answer is we DO--and WAY MORE than Europe does.
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dave 2:25PM (5/01/2006)
quote:
Now, let us school him:
Sir, MOST OF OUR (AMERICAN) FREIGHT GOES BY RAIL!!!
It is EUROPE that ships the MAJORITY of their freight by TRUCK!!
/quote
Care to support that? The fastest statistics I found suggest the opposite.
http://www.bts.gov/press_releases/2005/bts003_05/html/bts003_05.html
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John Smith 2:33PM (5/01/2006)
Yes Sir I do care to:
Free Flow: Rail freight: Europe's challenge
By Don Phillips International Herald Tribune
WEDNESDAY, SEPTEMBER 21, 2005
"The railroads of North America and the railroads of Europe seem to have only one thing in common: They both run on rails.
Beyond that, there is little that would seem even similar.
North American railroads are basically freight railroads designed to haul long, heavy trains. Passenger trains in North America are little more than an annoyance for private-enterprise freight railroads, something forced onto their tracks by government pressure.
In Europe, however, almost all railroads are government-owned to some degree, and their main purpose is passenger traffic. Freight movement is little more than an afterthought in most countries.
But just as U.S. railroads have come to make room for passenger trains, the European Union is taking steps to force European railroads to make space for more and more freight."
More at the link:
http://www.iht.com/articles/2005/09/21/business/transcol22.php
And you see why too? Here, private companies own the railroads, and freight is much more profitable to push than passengers.
Here's more from the article:
"The best argument for McClellan's position is the success of U.S. railroads today. Freight traffic is growing so fast that railroads are having a hard time keeping up with the demand."
"Such a success story would stun European railroads. In fact, it is doubtful they could handle such strong traffic growth today without billions of euros in investment, almost all of it from private sources. U.S. railroads are having a hard enough time keeping up, even with billions of dollars in new, mostly private investment every year in new locomotives, cars and track improvements.
North America, Russia and China are the biggest rail freight haulers in the world today, not only because of their size but also because they share a level of dedication that is lacking in Europe. The question now is whether Europe will join them."
Sorry to burst your bubble. I know you were hoping we'd become Sweden some day, but that will have to wait.
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John Smith 2:35PM (5/01/2006)
Furthermore, I'll do it again:
PDF here:
http://www.ksg.harvard.edu/taubmancenter/pdfs/working_papers/fagan_vassallo_05_rail.pdf
Wikipedia here:
"In the 1950s, the U.S. are Europe moved roughly the same percentage of freight by rail; but, by 2000, the share of U.S. rail freight was 38% while in Europe only 8% of freight traveled by rail."
http://en.wikipedia.org/wiki/Rail_transport_in_the_United_States
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John Smith 2:44PM (5/01/2006)
"Based on ton-miles, a measure combining weight and distance, rail and trucking each accounted for 40 percent of freight"
What trains lose in tonnage, they gain in distance.
Europe has a far more extensive rail system that we do, and thus they should ship more freight by rail than they can. Of course the UN doesn't issue nagging "reports", and the New York Times doesn't do snarky "exposes" about how deficient Europeans are at it, and how their "selfishness" fouls up the atmosphere.
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frank d 2:55PM (5/01/2006)
Must be an old photo.
As that Esso sign is in F / L = Francs / Liter; which would price 95 oct at roughly * $4+/ gallon or so if the Euro & USD were equal. Add 25% right now if you pay with USD at this moment.
( * I'm not sure about the Francs/Euro rate, so I calculated from what I remember from my last trip before France had the Euro )
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