After spiking to an all-time high of more than $5 last June, average gas prices in the U.S. have settled back down to between $3 and $4 per gallon since December 2023.
The decline reflects increased capacity at domestic refineries and a decline in the price of crude oil in the past year. The average price in the U.S. for 1 gallon of gas at the time of publication was $3.89 per gallon, according to GlobalPetrolPrices.com.
That may still feel like a lot for many consumers, but the pain at the pump is actually much worse in some other countries.
Residents of Hong Kong pay the highest international gas prices, with 1 gallon setting them back $11.43. Iceland comes in second at $8.91 per gallon, followed by Monaco at $8.49 per gallon.
At the other end of the spectrum, Venezuelans pay just 1.6 cents for a gallon of gas, the cheapest price on the planet. Those living in Iran and Libya also pay less than a dollar per gallon of gas, at 10.8 cents and 12 cents, respectively.
Lower Gas Prices Might Not Last Long
Lower gas prices in the U.S. may not last too long, however.
OPEC+ announced last spring its plans to cut oil output. When or if that happens, world oil prices would likely skyrocket and gasoline prices would follow suit, says Giacomo Santangelo, an economist with Monster Intelligence.
“They announced months ago that they’re going to limit production, but they didn’t say by how much,” he says. “When they make that announcement, we will see huge movement in the market.”
[Read: How to Budget for Rising Gas Prices]
Countries Have Some Control Over Gas Prices
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 governments place on gas or the amount that countries subsidize gas prices.
Many countries in Europe, for example, charge hefty taxes on gas purchases in a bid to reduce consumption, both because they don’t have much domestic production and to lower their environmental impact, says Ramanan Krishnamoorti, professor of petroleum engineering at the University of Houston.
“But in the places where gas prices are lowest, they either have it as a natural resource in abundance, or the countries have made an effort to subsidize the production of gasoline because it’s such an important economic engine for the country,” Krishnamoorti says.
[Read: 10 Best Gas Apps to Save You Money]
American gas prices are among the lowest in industrialized nations because the federal government levies very few taxes on fuel. Some state governments, however, levy taxes and fees that push up the price at their pumps and lead to disparities in gas prices from state to state.
Pennsylvania now charges the highest gas tax (61.1 cents per gallon), while Alaska the least (8.95 cents per gallon). In addition, some states like California have requirements that gas stations switch to a more environmentally friendly gasoline blend in the peak summer months, further pushing up prices.
But lower overall prices across the country are good news for the U.S. economy as a whole.
“The higher prices were one of the major contributors to the inflationary spike, which was close to double digits for a brief time,” says Peter Schwarz, economics professor at the University of North Caroline–Charlotte. “As gas prices have come down, that has taken that component out of the inflationary pressure.”
[READ: Is It Cheaper to Drive or Fly This Summer?]
Here’s a look at the 10 countries where gas is most expensive right now, according to GlobalPetrolPrices.com at the time of publication:
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A Look at Gas Prices Around the World originally appeared on usnews.com
Update 07/24/23: This story was published at an earlier date and has been updated with new information.
