The usage and pricing of gasoline results from factors such as crude oil prices, processing and distribution costs, local demand, the strength of local currencies, local taxation, and the availability of local sources of gasoline (supply). Since fuels are traded worldwide the trade prices are similar, the price paid by consumers largely reflects national pricing policy: some regions, such as Europe and Japan, impose high taxes on gasoline; others, such as Saudi Arabia and Venezuela, subsidise the cost. Western countries have among the highest usage rates of gasoline per person. The largest consumer of gasoline is the United States, which used an average of 386 million US gallons (1.46 gigalitres) of gasoline each day in 2005.
Gasoline usage and pricing in the United States
Despite high demand in the country and despite rising fuel costs, gasoline prices are low in the United States when compared with most other Western countries. As of December 21, 2008, the United States average price of self-serve regular unleaded gasoline was $1.65/gal. Finished motor gasoline amounts to 44% of the total US consumption of petroleum products. This corresponds to 18.5 Exajoules per year. According to national figures from the US Department of Energy, in March 2007 52% of the cost of gasoline went to pay for crude oil, 24% for refining, 15% to taxes, and 9% for distribution and marketing. By April 2008, these had changed to 72.7% for crude oil, 10% for refining, 11% to taxes, and 6% for distribution and marketing.
In 2008, a report by Cambridge Energy Research Associates stated that 2007 had been the year of peak gasoline usage in the United States, and that record energy prices would cause an "enduring shift" in energy consumption practices. According to the report, in April gas consumption had been lower than a year before for the sixth straight month, suggesting 2008 would be the first year US gasoline usage declined in 17 years. The total miles driven in the US began declining in 2006.
Gasoline usage and pricing in Europe
Most European countries have high fuel taxes. The prices have traditionally been three to four times the price in the United States, with prices during 2000-2005 of €1,50/litre (about US$2.14/l or $8.10/gal) while the US had prices around $1.50/gal or $0.40/l. After a large increase until the summer of 2008, the end of 2008 experienced a strong decline linked with a sharp economic downturn, with the average price of gas in the U.S. at $1.87/gal (December 2, 2008). However, the price of gas in Europe is still more than triple the US price at €1.45/litre. Russia and some neighboring countries have a much smaller tax, with gasoline prices similar to the US.
Countries with subsidised gasoline
A number of countries subsidise the cost of gasoline and other petroleum products. Subsidies make transport of people and goods cheaper, but discourage fuel efficiency. In some countries, the soaring cost of crude oil since 2003 has led to these subsidies being cut, moving inflation from the government debt to the general populace, sometimes resulting in political unrest.
Fuel subsidies are common in oil-rich countries. Venezuela, which has vast oil reserves, maintains a price of Bs.F 0.097 per litre (around US$0.05), and has done so since 1998. Other countries with subsidised fuel include Iran, Saudi Arabia, Egypt, Burma, Malaysia, Kuwait, China, Taiwan, South Korea, Trinidad and Tobago, Brunei and Nigeria. United States gas and heating oil subsidies are not so visible and are generally in the free or reduced rate lease of government land, tax incentives, grants, and other compensation from the federal and the state governments. Also, pricing is a federal concern to ensure supply and demand within limits to the consumer. In the absence of subsidies in the United States, per gallon prices are expected to reach and or exceded European levels.
China
See also: Automobile industry in ChinaIn China, where the state oil companies are restricted from passing on new crude costs to their consumers, auto sales were predicted to grow by up to 15-20% in 2008. This is in part a result of economic growth rates of over 10% for five years in a row.
Indonesia
In March 2005, Indonesia increased the price of gasoline and diesel by 29%, causing widespread protests. The price of gasoline was raised from Rp 1800 (US$0.20) per litre to Rp 2400 (US$0.25) per litre, while diesel rose from Rp 1650 (US$0.18) to Rp 2100 (US$0.23). Prices were increased again in October to Rp 4500 (US$0.48) a litre, an 87.5% rise, for gasoline, while diesel was increased to Rp 4300 (US$0.46), and kerosene, used for cooking, increased from Rp 700 (US$0.08) to Rp 2000 (US$0.22) per litre. The price increases came as oil prices threatened to increase the government's oil subsidy to US$14 billion per year, and caused further protests.
With oil reaching over US$130 a barrel, Indonesia further increased prices on May 24 2008 to Rp 6000 (approx. US$0.65) per litre, and diesel to Rp 5500 (approx. US$0.60) per litre, while kerosene was raised to Rp 2500 (approx. US$0.28), moves which caused widespread protests. In addition, it was suggested that private car owners, who are wealthy in Indonesian terms, would eventually be excluded from subsidies entirely, with the cheap fuel limited to public transport and motorcycles.
People have been encouraged to switch to LPG for cooking, as Indonesia is the world's largest exporter, whereas its oil industry is in decline, and it is now a net importer.
Malaysia
Malaysia spends US$14 billion subsidising gasoline, diesel and gas each year. Effective June 5, 2008 gasoline prices increased by 40% to RM2.70/litre (US$3.30 a gallon), from RM1.92/litre (US$2.32 a gallon). Diesel prices rose by RM1.00/litre to RM2.58 (US$3.04 per gallon), a 67% increase. It was announced that price increases were planned to bring fuel prices in line with global market cost, suggesting that it may hit US$3.80 per gallon by August. The Malaysian government has also announced a yearly cash rebate of RM625 per year to Malaysian citizens who own cars with an engine capacity of 3,000 cc or less and RM200 tax rebate to cars with an engine capacity of 3,000 cc and above to offset the increased costs. The government introduced a temporary ban on buying fuel within 50 km of the country border, but the ban was suspended following a price increase on June 7, 2008 for petrol of 41% (to MYR2.70 a litre) and for diesel of 63% (to MYR2.58).
On 22 June , 2008 the Malaysian government announced plans to set up separate pumps at its border petrol stations to sell fuel to foreigners at market rates so that only locals can benefit from subsidised petrol. The new pumps will target Singaporeans and Thais who make day trips across the border to fill their tanks with cheaper fuel there, although Singapore-registered cars must have at their tanks at least ¾ full before they will be permitted to leave Singapore in any case. Petrol stations within 50 km (31 miles) of the country's northern border with Thailand and southern border with Singapore would be affected. On 22 August, 2008 Malaysia will cut the petrol price by 5.6 percent to 2.55 ringgit (0.76 dollars) a litre due to a drop in global oil prices. The diesel price will also fall by 3.1 percent to 2.50 ringgit a litre with effect on the same day. The government's announcement comes just three days ahead of a crucial by-election contested by opposition figurehead Anwar Ibrahim in the northern Penang state. Anwar, who is bidding to return to parliament after a decade-long absence, has promised to cut fuel prices substantially if he wins the poll and later wrest power from the ruling coalition. Recently, the fuel price has dropped until MYR 2.45 and it has dropped for the second time. A further reduction was made on November 1, 2008. RON97 petrol was reduced from RM2.30 a litre to RM2.15 a litre, RON92 petrol from RM2.20 a litre to RM2.05 a litre and diesel from RM2.20 a litre to RM2.05 a litre. The Government revealed that it had ceased subsidizing petrol as of 1 November 2008 when the price of oil dipped below US$65 per barrel. However subsidies were still being paid for diesel and natural gas.
On 18 November, 2008 the Malaysian government made further reductions in the price of gasoline cut pump prices by seven per cent to RM2.00 ringgit per litre and diesel by 15 sen to RM1.90 per litre. The government said that at current prices they were making about 30 sen per litre in sales. Then again on December 3, petrol prices were reduce further. Gasoline prices were reduced 10 sen to RM 1.90 per litre and as for diesel, they were reduced 10 sen to RM 1.80 per litre. On 16 December 2008, the price of RON97 petrol is was reduced further to RM1.80, while RON92 is selling at RM1.70 a litre. The pump price of diesel was reduced to RM1.70 a litre.
From 1 September, 2009 however, the price for RON97 increased to RM2.05, while the RON
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