bid1 Posted September 19, 2005 Share Posted September 19, 2005 I keep hearing that Europe and the rest of the world have been paying at least $4 a gallong for gas for years. And it just escapes me as to why we have been blessed, here in the US, paying $1.30 until last year. Today we, in the US, are paying about $3 and people in the UK are paying about $7 a gallon. Can someone explain why please? I mean we buy oil from the same vendors, same countries. This is for a term paper. ThanX much Link to comment Share on other sites More sharing options...
method Posted September 19, 2005 Share Posted September 19, 2005 The Europeans pay more because of taxes. Link to comment Share on other sites More sharing options...
rumbleph1$h Posted September 19, 2005 Share Posted September 19, 2005 Prices are high worldwide right now because demand is starting to exceed production capacity for the first time in history. Oil prices are determined by open trading in NYMEX. 1000 barrel contracts of W. Texas intermediate oil are traded and worldwide prices are based off this (with adjustments for things like oil quality and traveling distances). Oil producers then sell oil into this system and refiners purchase from it. Because of the nature of this open-market, small contract marginal pricing, prices are driven unnecessarily high during times when demand exceeds production (like now). THe smallest change in supply, or even mere speculation can make oil and gas prices fluctuate somewhat dramatically. The volatile prices brought on by this (and superficial price drops when increasing supply) discourages investment and amplifies the effect by not allowing for new projects (demand keeps rising, productive capacity is staying nearly the same). Like 'method' said, Europeans pay more for gas mainly because of taxes. Many European countries impose taxes at 2 or 3 times as much as the actual cost of the gas. Compare this to the ~ 30 cents we pay at the pump and you can see it's a big difference. Link to comment Share on other sites More sharing options...
Aaron Veteran Posted September 19, 2005 Veteran Share Posted September 19, 2005 Link to comment Share on other sites More sharing options...
FlibbyFlobby Posted September 19, 2005 Share Posted September 19, 2005 586550336[/snapback] Good old Britain! With Blair and his crew taxing out businesses, and public farces like the kyoto agreement to disguise the fact that alternatives arent being considered until petrol has run out. Link to comment Share on other sites More sharing options...
NTUsEr Veteran Posted September 20, 2005 Veteran Share Posted September 20, 2005 Something that i still like about the US, are taxes are loooow :-D though that will change :( Link to comment Share on other sites More sharing options...
Recommended Posts