The Real Cost of Gas

Even when gas prices skyrocketed two years ago, Americans enjoyed a relative bargain at the pump compared to European nations. Many countries impose much larger gas taxes for varied reasons – some to raise revenue, others to curb consumption, and many other reasons.

But many economists point out that even Europeans are getting a steal thanks to subsidies and other hidden costs covered by citizens with their tax dollars.

What is included in the cost of a $2.54 gallon of gas?

• Finding oil

• Pumping it out of the ground

• Refining it into gasoline

• Delivering gasoline to service stations

• Small profit to the service station

What isn’t included, but would add up to $12 per gallon if it were factored into the price?

• The cost to the environment and climate change from burning gasoline

• The cost to the government of cleaning up oil spills

• Tax subsidies to the oil industry

• Military costs associated with gaining access to and then protecting access to oil

• Health care costs for respiratory illness caused by polluted air