- The Washington Times - Friday, June 6, 2008

American motorists think they feel pain. U.S. gas prices continued to spike higher this week to a national average $3.98 per gallon, according to a June 2 survey of stations by AAA and the Oil Price Information Service.

But in Britain, motorists’ pockets are getting picked for as much as $9.10 a gallon. Some economists predict gas prices there could top $13 by the end of the year.

Britain´s gas price crisis is compounded by a 65 percent fuel tax - the highest in Europe.

“We were spending around 50 to 60 pounds [$100 to $120] a week on petrol a year ago. Now we´re spending between 80 and 90 pounds [$160 to $180],” fumed Amanda Newton, a health authority worker from Whitley Bay, in northern England.

While oil prices have risen dramatically around the world in the past year, the sharpest increase has been for customers - mostly Americans - paying with dollars that have rapidly lost value. Customers in countries where the local currency is strong - Britain and Western Europe - have seen fuel prices increase about 20 percent less than they have in the U.S.

In Japan, where a gallon of gas costs about $5.77, Hiroyuki Kashiwabara said his monthly spending on gasoline has increased nearly $100 over the past couple of months.

“It’s been tough,” he said. “My salary doesn’t change and I can’t cut back on my spending on food or anything else.”

Drivers in Israel face similar financial straits. A gallon of gas there costs about $8.11 - 22 percent more than it cost a year ago, according to Amit Mor, an Israeli energy analyst.

“It´s a fantastic increase,” said Mr. Mor. “People are complaining about the high prices, but they haven’t reduced their consumption.”

It has gotten so bad in Italy that fishermen there are protesting the impact of rising diesel-fuel prices, which they say have reduced the profit from their catches by 20 percent since 2000. Fuel costs now account for 60 percent to 70 percent of the price of Italian seafood, according to Luigi Giannini, head of the Italian fishing federation Federpesca.

The effects of higher gas prices on motorists can vary widely, depending on taxes and subsidies. In high-tax Europe and Japan, for example, drivers have grown accustomed to gas prices that would astonish American motorists.

High gas taxes discourage driving and cause people to seek other means of transportation, such as mass transit, according to Lon Anderson, spokesman for AAA Mid-Atlantic.

“Taxing both car and fuel sales at high levels only forces people to make a decision not to drive,” he said. “America does not lay on these high taxes and I believe it is to our benefit.”

Nations that produce large amounts of oil aren’t necessarily in better shape.

Russia is the world’s second-biggest producer of oil, but gas there costs about $3.68 a gallon. Although that price is about 10 percent less than what motorists pay in the United States, the price looks a lot less appealing to a Russian who earns about six times less than the average American.

Taxes account for more than 60 percent of the cost of a gallon of gas in Russia. Limited refining capacity and the cost of transporting gas across the vast country also contribute to higher prices there.

Turkey faces similar problems. Gas costs $11.29 a gallon there, meaning filling up the tank of a midsize car can cost nearly $200 - enough to buy a domestic plane ticket.

But it’s not that bad everywhere.

In China, gas prices hover around $2.93 per gallon, thanks to government subsidies.

And in Venezuela, traditional subsidies and abundant supplies have held gas prices to a rock-bottom 12 cents a gallon.


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