Gasoline and diesel usage and pricing
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 or subsidy, and the availability of local sources of gasoline. Since fuels are traded worldwide, the trade prices are similar. The price paid by consumers largely reflects national pricing policy. Most countries impose taxes on gasoline, whereas a few, such as Venezuela, subsidize the cost. No country's taxes cover all the negative externalities associated with usage, that is they do not make the polluter pay the full cost. Western countries have among the highest usage rates per person. The largest consumer is the United States.
Fuel prices in the United States
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 fuel consumption had been lower than a year before for the sixth straight month, suggesting 2008 would be the first year US usage declined in 17 years. The total annual distance driven in the US began declining in 2006.After Hurricane Katrina and Hurricane Rita, gas prices started rising to record levels. Increases in crude oil prices significantly predict the growth of real gross domestic product, but increases in natural gas prices do not. In August 2005, after Hurricane Katrina, spot market gas prices surged past, and by 22 September 2005, before Hurricane Rita's landfall, had risen to.
In the fifteen years prior to the 1973 oil crisis, gasoline prices in the U.S. had lagged behind inflation.
A May 2004 report by the Government Accountability Office on petroleum industry mergers from the 1990s to 2004 found that the mergers increased companies' ability to influence prices.
In early 2020, the national average gas price dropped to $1.73 per gallon. In 2021, it rose to $3.01/gallon, and by June 2022 reached over $5/gallon, with some areas reporting $6/gallon. Prices later declined but fluctuated through late 2022.
Factors affecting gasoline prices
According to the Energy Information Administration, as of March 2022, factors affecting the price of gasoline in the United States include the price of crude oil, costs and profits related to refining, distribution, marketing, and taxes. Higher octane levels cost more, with premium grade averaging about 68 cents per gallon more than regular grade in 2021. From 2012 through 2021, crude oil represented 54.8% of the average $2.80/gallon price, taxes 17%, distribution and marketing 14.3%, and refining 14%. In 2021, crude oil accounted for 53.6%, taxes 16.4%, distribution and marketing 15.6%, and refining 14.4%.Crude oil
is the main factor affecting gasoline and diesel prices. Exploration, extraction, and transport costs contribute to pricing. Between 2004 and 2008, global demand increases raised oil prices from, causing a corresponding rise in gas prices. OPEC production decisions and speculation in oil markets also influence gasoline prices.Marketing and distribution
Distribution and marketing costs cover transportation of crude oil to refineries and gasoline to retailers, as well as brand marketing expenses.Taxes
Other factors
Weather events, conflicts, and legislation for cleaner-burning fuels can raise prices. Gasoline costs also follow seasonal demand patterns, typically increasing in summer. U.S. consumption has generally risen since 1950, with notable dips during the introduction of corporate average fuel economy standards, the 1979 energy crisis, the early 1990s recession and Gulf War, and the Great Depression.Petrol usage and pricing in Europe
Most European countries have higher fuel taxes than the US, but Russia and some neighboring countries have a much smaller tax, with fuel prices similar to the US.Competitive petrol pricing in the UK is led by supermarkets with their own forecourts. Generally each supermarket tends to match the other's prices; the lead players being Asda, Tesco, Sainsbury's and Morrisons.
Countries with subsidised gasoline
A number of countries subsidize fossil fuels such as petrol/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 nations. Countries with subsidized fuel include Saudi Arabia, Iran, Egypt, Burma, Kuwait, Bahrain, Trinidad and Tobago, Brunei, Venezuela, Ecuador and Bolivia.
In February 2010, the Iranian government implemented an energy price reform by which the energy subsidies were to be removed in five years; the most important price hike was in gasoline, as the price went up from 1000 rials to 4000 rials per litre, with a ration of 100 litres per month for private passenger cars.
On 26 December 2010, the Bolivian government issued a decree removing subsidies which had fixed petrol/gasoline and diesel prices for the past seven years. Arguing that illegal exports of gasoline and diesel fuel to neighboring countries by individuals for personal profit was harming the economy, Bolivia eliminated the subsidies and raised gasoline prices as much as 83%. After widespread labor strikes, the Bolivian government canceled all future planned price hikes.
Venezuela used to have the cheapest gasoline in the world for decades, however on 19 February 2016 president Nicolás Maduro used decree powers to raise fuel prices by 6000%. This was the first rise in petrol prices in 20 years and he also set in place a sharp devaluation of the currency which he said aimed to shore up the country's failing economy, hard hit by falling oil prices which make up 95% of foreign income. Prices at the pump in Venezuela jumped as much as 6,086% for 95 octane gasoline, from 0.097 bolivars to 6 bolivars.
May 20, 2020 government increased the price to US$0.5 a litre.
Iran
The Iranian government introduced an energy price reform in February 2010. The reform was brought forward by the government and approved with some changes by the parliament. The major aim of the policy was to slow down the increasing trend of energy consumption in Iran by removing the energy subsidies. The plan included electricity, natural gas, gasoline, and diesel subsidies. According to the plan, all energy prices were to increase by 20 percent annually. The price reform was particularly important in gasoline, as consumption had been increasing dramatically creating a huge burden on government budget. Furthermore, to meet demand, Iran had to import gasoline from other countries, which made the country vulnerable to possible sanctions by the US and European countries. The gas price prior to reform was $0.10 US per liter with the quota of 100 liters per month per passenger car. The reform raised the price to $0.40 US per liter and later reduced the ration to 60 liters per month. The price for over-quota consumption and the imported cars were $0.70 US per liter. The energy price reform included a cash-rebate program through which each person received 455,000 rials per month from the government. The overall consumption of gasoline after the reform decreased from about 65 million liters per day to about 54 million liters per day.The price of gasoline based on the official USD to IRR rate is US$0.29/Litre in 2018 which is the second cheapest price in the world after Venezuela.
Nigeria
Petrol subsidies mainly benefit rich people. On 1 January 2012, the Nigerian government headed by president Goodluck Ebele Jonathan, tried to cease the subsidy on petrol and deregulate the oil prices by announcing the new price for petrol as US$0.88/litre from the old subsidised price of US$0.406/litre, which in areas distant from Lagos petrol was priced at US$1.25/litre. This led to the longest general strike, riots, Arab spring like protests and on 16 January 2012 the government capitulated by announcing a new price of US$0.60/litre with an envisaged price of US$2.0/litre in distant areas. In May 2016 the Buhari administration increased fuel prices again to NGN 145 per litre. In September 2020, the government had announced an increase in the pump price of petrol to NGN 151.56 per litre from NGN 148.More recently, following the election of President Bola Tinubu in 2023, the Nigerian government significantly reduced the petrol price subsidy, and a year later, it finally eliminated the subsidy altogether. In November 2024, Tinubu said that the removal of the subsidy is saving Nigeria US$7.5 billion per year.
Mexico
PEMEX, a government company in charge of selling oil in Mexico is subsidized by the Mexican government. This serves to quell inflationary pressures in Mexico. Mexico buys much of its gasoline and diesel from the United States and resells it at US$98 per barrel. Many residents of US border communities cross the border to buy fuel in Mexico, thereby enjoying a cheaper fuel subsidy at the expense of Mexican taxpayers. This has caused frequent supply shortages at a number of filling stations along the border for Mexican drivers, especially truck and bus drivers who use diesel.In 2017, Mexico ended its oil industry subsidies, leading to increased prices and widespread protests throughout the country.
Trinidad and Tobago
Trinidad and Tobago through its national energy agencies Petrotrin and Trinidad and Tobago National Petroleum Marketing Company Limited offers petroleum fuels at varying subsidized prices to the users within the country. Unleaded Gasoline is offered at two grades - Ron 91 at US$0.43/Litre and Ron 95 at US$0.91/Litre. Diesel is offered at US$0.24/litre, making this fuel some of the cheapest in the world.There are an estimated 791,086 cars in the country as of February 2015 and they consume 1.2 billion litres of liquid fuel annually.
The Government of Trinidad and Tobago spent an estimated US$173.2 million in subsidies for gasoline and diesel in the period spanning October 2014 - March 2015.