The US pump pain does not match Europe

The US pump pain does not match Europe

Gas or gasoline prices around the world underscore the way consumers in dozens of countries – especially in Europe – are paying much more than Americans today pay to refuel their cars.

Several European countries pay north $ 7 or $ 8 per gallon, including Germany, France, Italy, Spain and the United Kingdom. At the top of the list is Hong Kong, where prices per gallon are higher than $ 11, followed by Norway at over $ 10.

“European energy prices of all kinds are higher than what consumers in the United States are paying for,” Peter McNally, head of global industry, materials and energy at Third Bridge, told Yahoo Finance. “This was happening before 2022, but since then it has become wider.”

McNally explained that the main reason for the difference is “the difference in fuel prices between the US and Europe is the tax rates – Europe has significantly higher taxes than the US”.

Another reason for higher gasoline or petrol prices in Europe is because the continuation generally uses brent crude oil (BZ = F) as the raw material, which is traded at a premium compared to the US benchmark for West Texas Intermediate (CL = F).

“Not only do refineries in Europe pay this premium for crude oil raw materials,” McNally noted, “but they generally have higher operating costs than refineries in the United States.”

The countries that pay the least for gas are the oil producers Venezuela, Iran and Libya, a gallon of diesel fuel in these parts costs between 8 cents and 20 cents per gallon – cheaper than bottled water in the US

A customer fills his taxi at a Texaco Inc. gas station  in London, United Kingdom, on Monday, June 13, 2022. Last week, fuel prices in the United Kingdom rose to a 17-year high to highlight the country's inflationary pressures.  Photographer: Chris Ratcliffe / Bloomberg

A customer fills his taxi at a Texaco Inc. gas station in London, United Kingdom, on Monday, June 13, 2022. Last week, fuel prices in the United Kingdom rose to a 17-year high to highlight the country’s inflationary pressures. Photographer: Chris Ratcliffe / Bloomberg

“Rising interest rates around the world will hit the consumer’s pocketbook”

As central banks around the world continue to fight inflation by raising interest rates, demand for gasoline and other refined products is likely to follow.

“Rising interest rates around the world will hit the consumer’s pocketbook,” Andy Lipow of Lipow Oil Associates wrote in a note to investors. “I believe it will lead to additional disruption of demand and lower prices.”

Relief may come to Americans: The national average for gasoline is now at $ 5 / gallon, down 2 pence from a record high earlier this week, according to the AAA.

“I predict that gasoline prices will fall by 5 cents per gallon over the next 7 days to $ 4.95 and randomly another 5 to 10 cents after that,” Lipou said. “The prices of futures contracts for gasoline are far from high.”

The same may not be true of diesel prices, which continue to hit record highs.

“Diesel is the refined product that has the lowest supply in the world,” Lipow said.

Ines is a marketing reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre

Click here for the latest stock market news and in-depth analysis, including stock moving events

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for apple the Android

Follow Yahoo Finance at Twitter, Facebook, Instagram, Flipboard, LinkedInand YouTube

Leave a Reply

Your email address will not be published.