June 11, 2006
Here’s a fun one.
CNN’s Money lists a sampling of gas prices around the world. Locally (Dallas) we’ve been hovering around $2.80 +/- a quarter for a few months. Meantime, you could spend north of $6 a gallon in Europe, or just 12 cents a gallon in Caracas.
What’s more interesting is Money’s commentary:
‘”The price of oil is pretty much the same around the world,” said Dr. Frederic Murphy of Temple University’s Fox School of Business. “The difference between gasoline prices is determined by a country’s taxes or inefficient national petroleum monopoly.”
Murphy points out that previous oil crunches were precipitated by a devalued U.S. dollar, which oil trades in, and from embargoes. But neither of those events occurred before this one. “This crisis is pure market forces,” said Murphy.’
In other words, take away how much you pay in taxes for a gallon of gas, and the rest is all driven by speculation and profit-taking in the oil futures market.
Gives you a nice warm feeling, doesn’t it?