Tuesday, May 15, 2012

Gas Prices Around the World: Relative to Income, U.S. Has Some of the Cheapest Gas in the World

 Price
 Rank
   Country$/Gallon
 Premium
   Pain at the
  Pump Ranking
1Norway$9.6948
2Denmark$9.3742
3Italy$9.3529
4Netherlands$9.3537
5Greece$9.2323
6Sweden$8.9744
7Hong Kong$8.8931
8Portugal$8.8521
9U.K.$8.8434
10Belgium$8.8237
11France$8.7235
12Finland$8.5940
13Germany$8.5636
14Ireland$8.3439
15Switzerland$7.9547
16Slovakia$7.9319
17Hungary$7.6911
18Czech Rep.$7.5922
19Japan$7.5841
20S. Korea$7.5726
21Spain$7.5532
22Slovenia$7.5428
23Austria$7.4543
24Malta$7.3225
25Latvia$7.269
26Luxembourg$7.2451
27Lithuania$7.2412
28Estonia$7.0520
29Poland$7.0115
30Cyprus$6.9633
31Bulgaria$6.945
32Australia$6.7549
33Singapore$6.7045
34Romania$6.597
35Chile$6.5417
36Brazil$6.4113
37India$6.061
38Canada$5.7546
39S. Africa$5.728
40Seychelles$5.5314
41Argentina$5.4416
42China$5.314
43Thailand$4.966
44U.S. $4.1950
45Indonesia$4.113
46Russia$3.7129
47Malaysia$3.0024
48Mexico$3.2027
49Iran$2.7818
50Nigeria$2.332
51UAE$1.8953
52Egypt$1.7310
53Kuwait$0.8854
54Saudi Arabia$0.6152
55Venezuela$0.0955

The table above is based on this Bloomberg article "Highest & Cheapest Gas Prices by Country":

"The cost of a gallon of gasoline ranks with bad weather as one of the most universal complaints. In the U.S., the price of gas is getting even more attention than usual this year as presidential contenders battle over energy policy.

What's lost in the debate is how much the U.S. and other countries actually pay for gas, relative to one another and to their citizens' wages. The ranking above sorts 55 countries by: a) the average retail price at the pump for a gallon of premium gas (from April 2 to 11), and b) by "pain at the pump," which is measured by the percentage of average daily income needed to buy a gallon of fuel."

MP: The world's cheapest gas is found in Venezuela at $0.09 per gallon (cheaper than bottled water), where the cost of filling up the 39-gallon tank of a Chevrolet Suburban is only $3.51, compared with $163.41 in the U.S.  The most expensive gas among these countries is India, based on the "pain at the pump" measure.  A gallon of gas costs $6.06 in India, which is  more than 100% of per-capita daily income (based on annual per-capita GDP of $1,400).  If gas was that expensive in the U.S., it would cost about $200 per gallon (based on annual per-capita GDP of $48,387).  So even at $4 per gallon, gasoline here is a real bargain.

Based on the price of gas relative to income, the U.S. ranked No. 50 out of 55 countries for the "pain at the pump" measure, and that was based on gas prices at their peak in the U.S. in early April.  Now that U.S. prices have fallen by almost 20 cents in the last six weeks, the "pain at the pump" has eased somewhat - so quit your whining about "high" gas prices! Relative to income, we have some of the cheapest gas in the world.

HT: Sy Banerjee

46 Comments:

At 5/15/2012 9:51 AM, Blogger Jon Murphy said...

One thing to note that the Bloomberg article discusses is those countries at the bottom of the list (Venezuela, Saudi Arabia, Kuwait) do not have cheap oil because they produce it, but because they highly subsidize the price of gasoline.

 
At 5/15/2012 10:20 AM, Blogger Cooper said...

US data looks wrong or I'm misreading the chart, but $4.00 is not 50% of average US daily income

 
At 5/15/2012 10:26 AM, Blogger Mark J. Perry said...

50 is the U.S. ranking out of 55 countries.

 
At 5/15/2012 10:31 AM, Blogger PeakTrader said...

Yes, however, Americans drive bigger autos and drive longer distances, from their big houses, while Europeans take mass transit or ride bicycles shorter distances from their small houses.

 
At 5/15/2012 10:47 AM, Blogger Jon Murphy said...

Yes, however, Americans drive bigger autos and drive longer distances, from their big houses, while Europeans take mass transit or ride bicycles shorter distances from their small houses.

Right. Possibly (probably) because gas is so much cheaper.

 
At 5/15/2012 10:52 AM, Blogger Buddy R Pacifico said...

What happens in India when it succeeds in keeping its #1 pain at the pump status?

"India's oil ministry has sought an additional cash compensation of 400 billion rupees ($7.88 billion) from the finance ministry to partially cover revenue losses of state-run companies that sell diesel, kerosene, and cooking gas at state-set subsidised rates, the oil secretary said on Wednesday."

 
At 5/15/2012 10:57 AM, Blogger PeakTrader said...

Jon, lots of goods are much cheaper. That's why U.S. living standards are so high.

 
At 5/15/2012 11:00 AM, Blogger morganovich said...

this seems a bit simplistic though.
americans consume far more gasoline per capita and are far more likely to own cars.

it would be interesting to see the % of disposable income spent on gasoline in these countries. that would seem to provide a good gauge for just how much pain increases in pump prices can inflict.

euro policy has been dramatically anti car for ages. the license fees, taxes etc are outlandish. denmark has a 150%ish (it's complex 105% on price under 6k eur and 180% tax on above) tax on new cars. you can imagine what this does to demand.

the eu also has the mirror image of our transport networks. people go by rail and freight by road. it's just the opposite in the us.

 
At 5/15/2012 11:02 AM, Blogger Jon Murphy said...

it would be interesting to see the % of disposable income spent on gasoline in these countries. that would seem to provide a good gauge for just how much pain increases in pump prices can inflict.

That's what the Pain in the Pump Index is measuring. Although, I believe it is the price as a percentage of average daily income.

 
At 5/15/2012 12:09 PM, Blogger morganovich said...

jon-

i don't think that patp metric is adjusted for the amount you consume. it's just the price of gas relative to income not expenditure on gas relative to income.

consuming 2 gallons of $9 gas a month is far less of a big deal than going through 200 gallons at $3.50.

 
At 5/15/2012 12:35 PM, Blogger Jon Murphy said...

don't think that patp metric is adjusted for the amount you consume. it's just the price of gas relative to income not expenditure on gas relative to income.

consuming 2 gallons of $9 gas a month is far less of a big deal than going through 200 gallons at $3.50.


True, but it is probably a good indicator of consumption. If the P@tP Index is low (like the US), we can probably assume that consumption is relatively high.

 
At 5/15/2012 12:39 PM, Blogger bart said...

Unleaded gas this week at the EIA is *up* to $4.02/gallon.

 
At 5/15/2012 12:39 PM, Blogger bart said...

Gas prices per country, most to least expensive


http://www.nowandfutures.com/images/gas_price_by_country2012a.png

 
At 5/15/2012 12:46 PM, Blogger AIG said...

this seems a bit simplistic though.
americans consume far more gasoline per capita and are far more likely to own cars.this seems a bit simplistic though.
americans consume far more gasoline per capita and are far more likely to own cars.


Yes, but looking at the % of income spend on gasoline won't be any less "simplistic". After all, if you are completely priced out of the gas market, like you may be in India, your % of income spend on gas may well be 0. Any increases in that price, won't affect you, since you'll still be at 0.

It is more important, as far as I'm concerned, to look at this index. The consumer adjusts their lifestyle to reflect this "pain" at the pump in terms of how much they spend, in relation to other goods. After all, just looking at the % spend on gas won't be very useful without looking at the % spend on other goods, many of which are dependent on the amount you spend on gas.

People in Europe may spend a lot less on gas, but they certainly spend a lot more on transportation, if one takes into account all the extra costs imposed on them because of the lack of mobility and housing choices.

 
At 5/15/2012 12:46 PM, Blogger Mark J. Perry said...

EIA has the current price of gas at $3.75 per gallon.

 
At 5/15/2012 12:50 PM, Blogger morganovich said...

jon-

sure, but if you know consumption as a % of disposable income, then we can really gauge how a price hike inflicts pain and also get a sense of how the elasticities work.

my suspicion is that $9 gasoline drives a more than 50% usage reduction from $4.50. at a certain point, you just flip over and cannot use a car to commute, so you stop entirely.

for the most part, gasoline taxes are highly progressive in the EU as only the wealthy have cars and drive whereas in the us, the base of drivers is far, far wider.

denamrk has 2.12mm cars for 5.5 million people a 45% rate.

germany has 41 million cars for 81 million people. france has 31 for 64.

the us has 254mm for 309 million, an 82% rate.

the whole bottom half of most eu countries have no car while in the us, few who want one do not have one.

i'm sure the causality here flows both ways. there are fewer cars in the eu because there are higher taxes and fuel costs, but these high taxes and fuel costs are made possible because a majority do not own cars and support taxes paid by others. there's a bit of chicken and egg here.

 
At 5/15/2012 12:57 PM, Blogger Jon Murphy said...

You make a good point, Morganovich (as always).

This has gotten me thinking. Maybe if I have some free time this weekend, I'll see what I can come up with as far as % of DPI, price elasticity, etc.

 
At 5/15/2012 1:02 PM, Blogger bart said...

Different link shows $4.02 nper gallon and up from last week.

Check it yourself, Dr.


http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_w.htm

 
At 5/15/2012 1:06 PM, Blogger Jon Murphy said...

I see what's going on:

You're both right.

Bart is quoting Premium prices and Dr. Perry is looking at the average of all grades.

 
At 5/15/2012 1:07 PM, Blogger Jon Murphy said...

Regardless, the point remains. Gasoline prices have fallen. When that article was written, premium prices were $4.19. Now they're $4.02

 
At 5/15/2012 1:08 PM, Blogger Mark J. Perry said...

Those are weekly averages and the current price at the EIA website is $3.81. An even better source is probably GasBuddy.com, which is showing $3.73 as the current national average. AAA Daily Fuel Gauge Report is also showing $3.73 as the current national average price.

 
At 5/15/2012 1:11 PM, Blogger Mark J. Perry said...

Thanks Jon. Either way, whether we look at regular unleaded, or premium, gas prices have come down about 20 cents since early April. So my point stands: Compared to early April when the Bloomberg survey was done, gas prices have fallen for Americans by about 20 cents per gallon.

 
At 5/15/2012 1:13 PM, Blogger Jon Murphy said...

Compared to early April when the Bloomberg survey was done, gas prices have fallen for Americans by about 20 cents per gallon.

Right-o. And if you drive a car with a 12-gallon tank, that translates into about a $2.40 per tank savings.

 
At 5/15/2012 1:20 PM, Blogger bart said...

JM:
Bart is quoting Premium prices and Dr. Perry is looking at the average of all grades.



Look again - that $4.02 price is for All Grades Reformulated. Not premium.

 
At 5/15/2012 1:23 PM, Blogger bart said...

JM: premium prices were $4.19. Now they're $4.02


What I said is that the price was UP from last week, and if you look at the link again, that's what you'll see.

I'm not saying that prices aren't down since a peak a few weeks ago.
Anecdotally, gas prices are up about $.04/gallon since last week where I live.

Additionally, neither GasBuddy nor AAA have gas price history going back as far as EIA data.

 
At 5/15/2012 1:24 PM, Blogger Jon Murphy said...

Look again - that $4.02 price is for All Grades Reformulated. Not premium

Gotcha.

Considering, though, reformulated gasoline only accounts for about 30% of US gas consumption (it is required in 17 states and DC), I'm not sure that is the best measure to track gas prices.

Regardless, the point still remains. Those prices are down from mid-April as well. No matter what we are looking at, gas prices have dropped over the past month.

 
At 5/15/2012 1:26 PM, Blogger Jon Murphy said...

What I said is that the price was UP from last week, and if you look at the link again, that's what you'll see.

I'd caution about using a week as a trend. One week does not a trend make. Prices can fluctuate week to week based on any number of factors. What is more important is the overall trend which is currently declining.

 
At 5/15/2012 1:30 PM, Blogger Jon Murphy said...

Actually, considering Reformulated is the only one that is up, that suggests more there is a price increase due to something in the reformulation process, not that the fundamental price of gasoline itself is rising.

 
At 5/15/2012 1:36 PM, Blogger bart said...

JM: Gotcha.

Very tacky.



I'd caution about using a week as a trend. One week does not a trend make. Prices can fluctuate week to week based on any number of factors. What is more important is the overall trend which is currently declining.


OMG. Is that how you normally are?

I posted one data point about the gas prices I track, and now you're warning me and assuming/implying that I'm saying it's a trend - and after I specifically noted that it's down since its peak?

And the peak on it was $413.50, not what you quoted 4/2.


Good grief...

 
At 5/15/2012 1:39 PM, Blogger bart said...

Actually, considering Reformulated is the only one that is up, that suggests more there is a price increase due to something in the reformulation process, not that the fundamental price of gasoline itself is rising.

It is the period of the year when formulations change... and the raw data shows that it's only down 2.7% since last year.

Not exactly a huge move.

I'd tell you why I use the reformulated price, as opposed to another, but you'd probably attack that too. :(

 
At 5/15/2012 2:29 PM, Blogger morganovich said...

bart-

fwiw, that "gotcha" seems to me like he was intending it in the sense of "oh, i see" or "i understand" not as some sleight or attack as it seems you took it based on your response of "tacky".

i think you misunderstood him and are seeing malice where there is none.

 
At 5/15/2012 2:35 PM, Blogger Jon Murphy said...

Thank you, Morganovich. That was my intention.

Bart, I apologize for being unclear. I'll do my best to clarify next time. I really meant no harm.

 
At 5/15/2012 2:48 PM, Blogger bart said...

Cool JM, and apparently I over reacted too.

What's done is done - we shall carry on.

 
At 5/15/2012 2:50 PM, Blogger bart said...

By the way, I downloaded the EIA data series that the Dr. used... and find that the latest price is actually up about 2.5% on an annual change rate basis.

Here's the YoY changes since early March:

6.57%
3.58%
2.11%
-0.31%
-3.64%
-4.84%
-6.33%
-0.48%
2.38%
1.39%
2.46%

 
At 5/15/2012 2:54 PM, Blogger Jon Murphy said...

Bart,

Sorry, I'm a tad confused:

Are those numbers the YoY for each week? So, last number is the week of May 14th compared to the same week last year?

 
At 5/15/2012 3:08 PM, Blogger bart said...

Jon - yes.

The +2.46% compares the $3.75 price this week against the price 52 weeks ago which by my reckoning was $3.66.

 
At 5/15/2012 3:18 PM, Blogger Jon Murphy said...

m'kay. Thank you very much.

 
At 5/15/2012 3:26 PM, Blogger Hydra said...

Is.t the price of the gas a out the same, The difference being mostly tax? The pain at the pump may be eased by other benefits.

 
At 5/15/2012 5:06 PM, Blogger PeakTrader said...

Gasoline prices are high in San Francisco:

West Coast spike in gas prices tied to refineries
May 14, 2012

"Motorists across most of the country have been getting a break on the price of gas, but not on the West Coast.

The average price for a gallon of regular gasoline in Oregon was $4.17 Monday, up 16 cents from last week. The average was $4.20 in Washington state and $4.35 in California.

Meanwhile, the national average price dropped 5 cents to $3.73.

The West Coast switches to a more expensive fuel blend in summer to fight pollution, but analysts blame the current price spike on the failed restart of a BP refinery in Blaine, Wash., and maintenance work at several California refineries.

The BP refinery, the third-largest on the West Coast, produces 20 percent of Washington's gasoline needs but has been shut down since a February fire.

Meanwhile, five of California's 12 refineries — three in the San Francisco Bay Area and two in Southern California — temporarily reduced production because of planned maintenance."

 
At 5/15/2012 6:22 PM, Blogger Larry G said...

gas prices look to be a dollar cheaper in South Carolina:

http://www.southcarolinagasprices.com/

 
At 5/15/2012 6:29 PM, Blogger morganovich said...

peak-

cali always has more expensive gas. i lived in SF for 15 years and remember looking at national gas prices and thinking, "wow, i'd love to pay that little".

 
At 5/15/2012 6:56 PM, Blogger AIG said...

The difference being mostly tax? The pain at the pump may be eased by other benefits

You can be sure that the US collects far more from its gas taxes than Europe does.

Also, sure they get something in return. For example, every Greek peasant has a free-of-charge degree in aeronautical or electrical engineering from the local university, one of which exists in every Greek village. The question, however, is...so what?

 
At 5/15/2012 7:10 PM, Blogger Jon Murphy said...

I was down in CT two weeks ago and the price was $5/gal for regular.

 
At 5/15/2012 7:24 PM, Blogger bart said...

Jon: m'kay. Thank you very much.

You're most welcome.

 
At 5/15/2012 7:29 PM, Blogger bart said...

You can be sure that the US collects far more from its gas taxes than Europe does.


In very round numbers, the US collects an average of .55/gallon. Federal tax is 18.4 cents/gallon.

Sweden is about $4, Germany is over $6, the Netherlands bite is almost 60% of retail, and the UK is difficult to calculate (~$3/gallon + 20% VAT + CO2 excise tax) but is at least $5/gallon.

 
At 5/15/2012 10:34 PM, Blogger AIG said...

Bart, yes but now you've got to multiply it by the gallons sold.

 

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