A Look at Gas Prices Around the World

At an average of $4.59 per gallon as of May 19, American consumers are dealing with the highest gas prices the nation has ever seen.

But the pain at the pump is actually much worse in some other countries. The global average price of a gallon of gas, in American dollars, is about $5.13, according to GlobalPetrolPrices.com. But there’s a wide range in the price paid by country.

Residents of Hong Kong pay the highest international gas prices, with one gallon setting them back $10.97. Norway has the second-highest gas prices at $9.64 per gallon, followed by Denmark where gas costs an average $9.32 per gallon.

At the other end of the spectrum, Venezuelans pay just $0.08 for a gallon of gas, the cheapest prices on the planet. Libya and Iran also pay less than a dollar per gallon of gas, with petrol costing $0.12 and $0.20, respectively.

“People say that it’s terrible that the price of gas here is over $4, but gas prices in Europe are $6 or $7,” says Giacomo Santangelo, an economist with Monster Intelligence. “To Europeans, $4 a gallon is nothing.”

Incentivizing Behavior

Individual countries actually have some control over their gas prices via government policies. Since countries and gasoline retailers purchase gas on the open market, the biggest factor driving prices at the pump is the amount of taxes and fees that countries place on gas, or the amount that countries subsidize gas prices.

“In countries with good mass transit, they often try to incentive people not to drive by taxing gasoline at a far higher rate than we do in the U.S.,” says Patrick De Haan, head of petroleum analysis for Gas Buddy. “That’s true for much of Europe, but people have alternatives there to driving a car. You can usually take a train.”

[READ: How to Plan for Soaring Summer Gas Prices.]

American gas prices are among the lowest in industrialized nations because the federal government levies very few taxes on fuel.

The disparity in taxes also reflects differences in gas prices from state-to-state. Gas prices are highest in California, for example, which has the most cars in the country, residents pay $1.18 per gallon in taxes and fees alone. Meanwhile gas prices are lowest in Georgia, where taxes and fees only amounted to $0.48 per gallon, before the gas tax holiday the state put in place in March.

There are several gas price factors pushing costs up globally for gas and other commodities, including supply and demand related to the war in Ukraine, economic sanctions on Russia, and the continued impact of the pandemic. Given that all those factors appear fairly entrenched, it’s unlikely that gas prices will decline significantly any time soon, particularly as seasonal demand rises moving into summer.

[10 Gas Apps to Save You Money as Gas Prices Rise]

The Ripple Effect

That could spell trouble for the broader economy, as consumers look to adjust their budgets to accommodate higher gas prices, says Rob Smith, director, global retail fuel at S&P Global Commodity Insights.

“Higher gas prices just put more of a burden on people, and something has to give,” he says. “So people might not go out to eat at restaurants, they might skip going to the movies or decide not to buy the new iPhone. If you take all of that away, the economy starts to slow down.”

[Read: How to Budget for Rising Gas Prices]

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A Look at Gas Prices Around the World originally appeared on usnews.com

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