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High gas prices - it's personal

By: Staff

Date: 2005-04-14

High gasoline prices have been a fact of life in Europe for decades, but auto-dependent North Americans have had soft easy times. Now the other shoe is falling, and it's personal.

Cheap gas prices lured us into gas-guzzling hummers, fuel hungry SUVs and bigger, more powerful family cars. Some can afford this, and higher gas prices will probably not affect them much, but most of us will feel the crunch, and if it keeps up, it will affect our lifestyles. It may even seriously damage the national economy.

However, if you want to gripe about the situation, there's probably not much point in just blaming the gas companies. They're businesses. Making a profit is their job. A web site operated by the U.S. Department of the Environment's Energy Information Administration indicates that crude oil makes up about 44% of the cost of a gallon of gas. Distribution and marketing takes about 14% and federal taxes 27%. Refining costs and profits are only 15%.

That 27% tax looks pretty bad until you take a look at Europe. Compare, for example, filling the 14-gallon fuel tank of a Ford Focus in the U.S. (about $33) with filling the same tank in London, England (about $83). Now consider this. At pretax prices the costs would be $28 and $24, respectively.

In other words, the British tax the hell out of their motorists to keep them from driving too much and from purchasing gas guzzlers. As a result, most British motorists drive gas-sipping vehicles. The same government strategy seems to apply throughout most of Europe. German Gasoline, for example, costs about $5.70 per gallon but if the taxes are taken away what's left is about $1.70.

In auto-dependent North America, taxing motorists to reduce driving and promote public transportation is a hard sell politically, but in these times of escalating gas prices it may be an idea whose time is soon to come.

Meanwhile, there's all kinds of driver-friendly things that can help. For example:

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