U.S. gas prices rise. Yes, again.
I wonder if our non-American readers laugh at posts like this one. While record (national average) gas prices of $3.227 a gallon are a big deal here in the U.S., prices that low must sound delightful to Europeans used to paying six dollars or more per gallon. Still, if prices continue to go up the way they have, we'll be catching up with Europe soon enough. Where are prices headed for the rest of 2008? It's anybody's guess, but the experts are saying $4 a gallon this spring wouldn't surprise them. Others are more conservative and say they expect prices between $3.30 and $3.70. For the summer, the spring price shock might weaken demand and therefore drive prices down. Still, the general trend is upwards. One reason - on top of the weak dollar and high price of a barrel of oil - that prices at the pump will increase is the low profit that refiners are making off of each barrel. This year it's just $6, compared to $38 last year. Guess who's going to be picking up that bill?
[Source: Steve Hargreaves / CNNMoney]
Reader Comments (Page 1 of 1)
ug 2:47PM (3/11/2008)
Everyone's waiting for the inflection point in gas prices, the moment where americans pull the SUV needle out of their arm. We're not there yet, so "are we there yet????" posts like this are still premature.
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KarenRei 2:57PM (3/11/2008)
Yeah -- enough with all of the gas price posts. We get it; gas prices are going to be high this year. Tell us something we don't know.
By the way -- as for refiners' profits, a lot of people are unaware that refiners "soak the curve", so to speak, on fluctuating crude prices. They're the reason that gas prices don't change as dramatically or as quickly as crude prices. Unlike producers, who always make more money on high crude prices, refiners make extra money when crude prices fall (buy low, sell high) and less money when they rise (buy high, sell low).
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Carlos Ferreira 2:59PM (3/11/2008)
I won't laugh. Here in Portugal, we pay 1.20€ for a litre of diesel, and about 1.40€ for a litre of unleaded. Not fun, my old 1.4 SEAT Ibiza cost me 12€ every 100 km - that's over 15 dollars every 60 miles. No wonder everyone's going Diesel these days. I know I have!
It's been a long running idea, the one that the fuel prices will eventually work well for the environment. It's working: I still think the engine driving the grenness in our cars is the price of fuel. Hybrids, more efficient Diesels, fuel cells - that's just a way of getting away from the price of petrol, by using less of it.
When anyone comes to you to ask for environmental measures that reduce emissions, tell them no. This way, the market will save the earth - mass capitalism will save us all. Funny!
Carlos Ferreira
http://www.greencarvalue.blogspot.com
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rgseidl 3:00PM (3/11/2008)
US prices will not catch up to European ones because the tax differential remains high. Prices vary from country to country, but in e.g. Germany a US gallon (3.754L) of Euro95 (@EUR 1.41/L) will set you back around EUR 5.30 = $8.15 these days. Diesel is cheaper only because it's taxed at a lower rate.
Regular unleaded (Euro91) is being phased out because demand from the US is so high that wholesale prices have drawn level. Roughly 1 out of every 7 gallons consumed in the US has to be imported as finished gasoline due to lack of refinery capacity / excessive demand from trucks and SUVs.
For Europe - which has little remaining oil of its own - high fuel prices have actually been beneficial: they have created a market in relatively small, fuel-efficient cars and kept urban sprawl under control. This in turn has permitted networks of bicycle paths and public transportation systems to survive and expand.
In addition, the fuel taxes are set at fixed amounts per liter and do not depend on the price of oil. In relative terms, volatility in that price is therefore dampened out. Up to a point, this insulates European consumers from severe external shocks to their household budgets.
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Matt 4:44PM (3/11/2008)
Its about the equivalent of $8.50 per american gallon for petrol in the UK.
And tomorrow the tax on petrol is being increased as well, by 2p a litre they think, or about 15 american cents an american gallon. Lets call it $8.65 at current rates.
I have to work in central London so driving to work isn't an option anyway, but what annoys me is we are being priced out of driving, yet on my train journey to work each day the trains are literally at their maximum capacity. We cant fit any more people on public transport as it is!
After a 20 minute train journey with someone's head about 3cm from my nose, and someone else's arm wedged in the small of my back, I then had to wait for 3 trains on the jubilee line because there literally wasn't any space on the first 2.
Lets hope not many more people decide to start using public transport after tomorrow!!!
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Engel 6:39PM (3/11/2008)
Gas prices in Los Angeles are already well over $4.00/gallon. Driving through West Hollywood last week, I saw one gas station selling 87 grade @ $4.09, 91 grade @ $4.19 and 93 grade $4.29/gallon.
My road bike will be seeing a lot of love this year.
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jake 7:04PM (3/11/2008)
@Matt
Do you know if your public transport system is profitable? If it is they may expand capacity by having more trains run at peak time. Most public transport in the US isn't profitable and, except at peak hours, it usually isn't full. Most cities it is still possible to drive a car because there isn't as much congestion, so there is little incentive to improve or expand public transport.
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s10 9:23PM (3/11/2008)
@Matt I actually think public transport should be completely free, with no "profitability" sword of Damocles... Costs paid by TAX money.
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virgil 5:20PM (3/12/2008)
So average fuel efficiency in the US is 20mpg, and we pay $4 a gallon. In the UK most cars get 40mpg+ and they pay over $8 a gallon. Bottom line, we're both paying the same price per mile, but the US is burning through twice as much gas in the process.
What this comparison really reveals is that people in the US are far more eager to hang onto their cars, most probably due to the lack of other options in most cities. In contrast, people in the UK are more willing to take other transportation options seriously - partly because these options actually exist, but also because the cost of gas is only a fraction of the cost of driving. Add in high parking costs, road tax, and insurance (more car crime), and you have the real reason why less people drive in Europe.
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brn 7:32PM (3/12/2008)
At the Pioneer station at 1020 Talbot St near 1st Ave, St Thomas, UK, gas is currently (US)$7.89 cents per (US) gallon. Approximately, $4.85 cents of which is tax, bringing the pre-tax price to approximately (US)$3.04 per (US) gallon.
At the Gas Plus at 1615 High Country Dr NW & High Park Way NW , High River, Canada, the price of gas is (US)$3.93 per US gallon. About (US)$1.31 is tax, brining the pre-tax price to (US)2.62 per (US) gallon.
Local to me, gas is $3.20 per gallon. About $0.62 is tax, brining the pre-tax cost to $2.78 per gallon.
About once a year, I perform these calculations. This is the FIRST TIME, the US pre-tax cost wasn't the highest. For once, it's actually between the UK and Canada.
I'm sick of hearing how cheap our gas is.
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Bill 7:41PM (3/12/2008)
Speak for yourself - we'll be down at the VW dealer this fall ordering our 2009 diesel Jetta likely as soon as they are willing to take a deposit.
We here in the U.S. simply don't have any decent diesel options yet.
Unless one is willing to buy a 15+ year old Mercedes or pay the new car price for a 5 year old Jetta (with VW's historic maintenance issues, I want a factory warranty)
>people in the US are far more eager to hang onto their cars
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paul 11:21PM (3/12/2008)
I think this whole gas thing is a farce, everytime oil goes up or we have a hurricane somewhere gas goes up 5-10cents a gal. overnight. Someone needs to do something, it is the old oil companies get richer and we get poorer.
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