The price of gasoline varies by a ridiculous amount around the world, from pennies for a gallon in some countries to the equivalent of $10 in others. One of the big reasons for this variation is fossil fuel subsidies.

Driving The Nation's Lou Ann Hammond recently interviewed Renault's Philippe Schulz about these subsidies (video below), and he said that global gasoline subsidies total about $200 billion dollars a year. Hammond also spoke with the International Energy Agency's (IEA) Lew Fulton, who said a subsidy is "any government action that lowers the cost of energy production, or lowers the price paid by energy consumers." As we noted late last year, the IEA calculated that all fossil-fuel consumption subsidies totaled around $409 billion in 2010, almost $110 billion more than they were in 2009. That's not progress.

Iran is still one of the biggest subsidizers of fuel. China recently dropped a few places on the list of most subsidizing countries when it let the price of fuel rise, but many countries in the Middle East and Asia are still among the ones that have a heavy hand in defining what it costs their citizens to fill up. Here in the U.S., the government doesn't subsidize gasoline per se, but the gas tax is quite low. As we recently discussed, this is causing a problem for American highways.



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