U.S. Fuel Costs Remain Low by World Standard
Editor’s Note: This post by David Schepp originally appeared on March 29 on DailyFinance.com.
With average U.S. gas prices hovering at historic highs, plenty of Americans are anxious about the cost of filling up. Analysts blame the recent steady rise in oil prices on unease about the Middle East and anticipation of increased global demand as the world economy continues to recover from the recession.
According to AAA’s Daily Fuel Gauge Report on Tuesday (March 28), the nationwide average for self-serve unleaded regular gasoline was $3.59 a gallon. That’s about 80 cents a gallon more than a year ago and 30 cents a gallon higher than on the same day in 2008, when gasoline prices were rising toward their all-time record high of $4.11 a gallon, which they hit four months later.
Despite the pain Americans are feeling at the pump, we still pay much less than the drivers in many other developed nations in the world. Canadians, for example, pay about a third more than U.S. consumers, even though Canada is the biggest foreign supplier of oil to the U.S.
According to a survey this month of worldwide gasoline prices by AIRINC, a Cambridge, Mass.-based consulting firm, the price per gallon in Toronto averaged $4.96 for regular grade fuel, while in New York City, prices at the pump averaged $3.82.
Even Canadian prices are bargains compared to those in several European nations, as well as some in Africa and Asia. Among the nations with the highest gas prices: Turkey, Eritrea and Norway. Residents of Istanbul pay the equivalent of $9.63 a gallon, according to AIRINC’s survey, while those in Eritrea’s capital, Asmara, and Oslo aren’t far behind with per-gallon prices of $9.59 and $9.27, respectively.
Greece, Denmark, Sweden, Belgium, the United Kingdom and the Netherlands are also among countries with some of the world’s highest gasoline prices, with drivers paying at least $8 a gallon.
Still, it isn’t likely that many U.S. consumers will take much solace in knowing that they spend far less on gasoline than their counterparts elsewhere.
“I doubt many Americans are concerned about what others are paying overseas or outside of the United States,” says AAA spokesman Troy Green. That’s especially true for those living paycheck to paycheck, or on fixed incomes, or who have been unemployed long term, he says. “When you look at those three groups, it’s really tough on them right now.”
Despite ample supplies of crude oil, prices have risen steadily since last summer. Civil unrest in the Middle East is one reason some traders have been bidding up the price of oil. On Tuesday, crude prices remained above $104 a barrel in trading on the New York Mercantile Exchange.
Yet while gas prices in the U.S. and many other countries continue to rise, prices in Libya, which has been the scene of some of the region’s bloodiest chaos recently, have remained relatively stable at around 54 cents a gallon, according to AIRINC spokesman Scott Sutton. Libya, like many of its fellow OPEC nations, has among of the lowest gas prices in the world, thanks to government subsidies.
Sutton noted, however, that amid the current upheaval in their country, many Libyans are too fearful to fill up for fear of being shot. Other countries where gas prices remain at bargain-basement levels include Venezuela, Saudi Arabia, Turkmenistan, Bahrain, Kuwait and Qatar. In cities in each of those countries, pump prices were well below $1 a gallon, according to AIRINC’s survey. In the Venezuela capital of Caracas, heavily subsidized gasoline was selling for a mere 6 cents a gallon.
Whether gas prices in the U.S. will head lower or creep even higher in coming weeks in advance of the summer driving season remains unknown. After prices hit record highs in the summer of 2008, few analysts predicted that they would rapidly plummet to their lowest levels in years — but they fell to a national average of $1.62 a gallon on Dec. 30, 2008, according to AAA.
“It’s a foolhardy practice to try to predict long term what gasoline prices are going to be with a measure of accuracy,” says the AAA’s Green. “You just don’t know.”