Gasoline and diesel usage and pricing

Most countries impose taxes on gasoline (petrol), which causes air pollution and climate change; whereas a few, such as Venezuela, subsidize the cost.

[1] Some country's taxes do not cover all the negative externalities, that is they do not make the polluter pay the full cost.

According to the Energy Information Administration (EIA), as of March 2022, factors that affect the price of gasoline in the United States include the price of crude oil per barrel, costs and profits related to refining, distribution, and marketing, and taxes, along with the charge set by refiners for gasoline based on based on octane levels, with higher octane levels—premium grade cost about 68 cents per gallon more than regular grade in 2021.

In 2021, with the average price increased to $3.01/gallon, crude oil accounted for 53.6%, taxes for 16.4%, distribution and marketing for 15.6%, and refining costs and profits, for 14.4%.

[15] On the supply side, OPEC (or the Organization of the Petroleum Exporting Countries) has a great deal to do with the price of gasoline, both in the United States and around the world.

The price of transporting crude oil to a refinery then gasoline to a point of distribution is passed on to the consumer.

Extreme weather, war or natural disaster in areas where oil is produced can also in turn raise the price of a gallon of gasoline.

U.S. consumption of gasoline follows a seasonal pattern, where every year it is more expensive during the summer months when more people are driving.

Generally each supermarket tends to match the other's prices; the lead players being Asda, Tesco, Sainsbury's and Morrisons.

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.

Countries with subsidized fuel include Saudi Arabia, Iran, Egypt, Burma, Kuwait, Bahrain, Trinidad and Tobago, Brunei, Venezuela, Ecuador and Bolivia.

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.

After widespread labor strikes, the Bolivian government canceled all future planned price hikes.

[21] 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%.

The price reform was particularly important in gasoline, as consumption had been increasing dramatically creating a huge burden on government budget.

The energy price reform included a cash-rebate program through which each person received 455,000 rials ($15 US) per month from the government.

[26] In May 2016 the Buhari administration increased fuel prices again to NGN 145 per litre ($0.43 at black market rates for the currency).

[30] In 2017, Mexico ended its oil industry subsidies, leading to increased prices and widespread protests throughout the country.

There are an estimated 791,086 cars in the country as at 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 half year period October 2014 - March 2015.

It is estimated that these tax deductions are worth $4 billion annually and are currently being debated by the government for reform.

In 2021-22, gasoline and diesel prices surged in the United States, reaching record highs, as part of a larger trend of inflation.

[36] The average price of regular gasoline rose from $1.773 during the week of April 27, 2020, to $5 as of June 11, 2022, an all-time high.

[42] In 2014, Malaysia abolished fuel subsidies and began using a managed float system, in order to control the country's large current account deficit.