Posts Tagged ‘gas’

Why are gas prices so wildly different around the world?

Tuesday, March 22nd, 2011


(photo credit: Drew__)

If you’ve been in Europe recently, you’ve probably noticed all those extra digits in the price of “petrol.” In the U.S., we’re horrified at the idea of paying $4 a gallon for gas, but in Norway they’ve already blown past the equivalent of $9.

But… why? Is it harder to pump oil in to Norwegian gas stations? Is greater demand among the Norse driving prices up? Not even.

There are a few reasons, but according to Aaron Smith at CNN, it’s pretty much all about the government. Governments can either charge their citizens extra to buy gas (by taxing it) or the pay them to buy gas (by handing out subsidies, which lower the price per gallon).

Taxing gas is useful because the money pays for government programs. And handing out subsidies is useful if you want to keep your population happy. (You see this a lot in oil-producing nations like Saudi Arabia. It’s hard to be angry at the super-wealthy ruling elite when they’re basically paying for your gasoline.)

The moral of the story: Stuff is only worth what someone says it’s worth. $3 or $10, you still need it to make your Hummer go.

How much do you think you should pay to fill up your gas tank?

Today in Tapping the Brakes… Spain Slows Down to Save on Gas

Sunday, March 13th, 2011

traffic-lights.jpeg
(photo credit: masochismtango)

Sustainability is in again! While China tries to prevent its economy from growing out of control, Spain is slowing down for a totally different reason.

  • Uprisings in the Middle East – particularly Libya – have hit Spain in the gas tank, and transit authorities are already trying to adapt. Beginning March 7th, drivers will have to slow down from 120 to 110 kilometers per hour on most main roads.
  • Spain’s Deputy Prime Minister says the measure is extreme, and promises to change back as soon as possible. Supporters say that by saving at the pump, citizens will spend more of their money “going for tapas” and strengthening the economy.
  • According to one estimate, the new speed limit will reduce fuel costs by 15%. But Spaniards are skeptical, and some say this is just a sneaky way for the government to raise revenues by handing out more speeding tickets.

Facts & Figures

  • Spain usually imports 13% of its oil from Libya
  • Other measures in place are designed to cut total national fuel consumption by 5%
  • 110 kilometers per hour is equivalent to 68 miles per hour

Best Quote

“We are going to go a bit slower and in exchange we will consume less petrol and pay less money.” – Alfredo Perez Rubalcaba, Deputy Prime Minister

>> What do you think?

Could a small change in the speed limit be a sustainable way of reducing dependence on oil?

Who Gets Paid for Libyan Oil?

Wednesday, March 9th, 2011

“Oil markets have been spooked by fighting that has tended to play out near oil facilities such as the Ras Lanuf oil terminal, in eastern Libya. The complex is currently in the hands of rebels, although Libyan warplanes have launched air strikes near rebel positions on the outskirts of the town, according to witnesses.

The fact that many of Libya’s key oil installations are in the hands of rebels creates a headache for oil companies already hit by the U.S. trade sanctions adopted last month against Libya. The violence is deterring tankers from loading cargoes in Libyan ports, and even when they succeed, it is unclear who they should be paying for the crude—the opposition forces or the Gadhafi regime.”

What do you think?

Is the fall of a violent dictator in the Middle East worth more expensive gas prices in the U.S.?

When you’re pumping gas, what are you really paying for?

Friday, October 23rd, 2009

To understand what you pay for at the pump, first you should know where gas comes from. Gasoline is made from crude oil – the black oil that shoots up from the ground. Somebody’s got to collect it all and then refine it into a usable form. From there, it’s shipped all over the world to companies who market and distribute it to stations across their respective countries (think Shell, Texico, Chevron, etc.). Lastly, your local, state, and federal governments add taxes onto the cost of each gallon. From there, gas stations are happy to accept your money in cash, debit, or credit.

While your money goes directly to the gas station, it is really paying for all of these production stages. In total, you pay for the discovery, extraction, and shipment of crude oil; the refinement of oil into gasoline; the shipping, distribution, and marketing of gas by oil companies; the costs of running a gas station; and the taxes levied by the government. Simply put, you’re paying for it all!