FUEL PRICES * Worldwide Study - Gas in U.S. a deal compared with Europe

Most expensive found in Norway at $9.85 a gallon; heavy taxes help to raise European costs

Los Angeles,Cal,USA -The Los Angeles Times, by Marla Dickerson/The Detroit News -July 11, 2008: -- ... That's the priciest petrol on a list of world gas prices released Wednesday by Associates for International Research Inc., a Massachusetts-based relocation consulting firm that tracks the cost of living in dozens of countries... In fact, at just more than four bucks a gallon on average, U.S. gas is still cheap compared with much of the world... And it's not just Europe. People all over the world are shelling out more for gas than Americans -- who are considerably wealthier. That includes drivers in the East African nation of Eritrea ($9.46 a gallon), Kenya ($5.94), Nicaragua ($5.07), India ($4.94), Chile ($4.85) and El Salvador ($4.70)... In a more extensive study completed by the firm in March, consumers in nearly three-quarters of approximately 150 nations surveyed paid more for fuel than Americans do... So why the big price differences around the world? Experts say retail gas prices are influenced by a variety of factors, including the cost of refining, distribution and marketing. But the biggest single variable is government policy: Some countries tax gasoline heavily; others subsidize it to make it cheap... Many countries chose the former. In the United States, state and local taxes account for about 19 percent of the average price of a gallon of gas, according to the Energy Information Administration. In England, where London drivers are paying nearly $9 a gallon, taxes account for a whopping 81.5 percent of the pump price... European countries have long relied on hefty fuel levies to fund road work and social programs, and to encourage conservation. The same is true for some Asian nations, including South Korea ($7.33 a gallon) and Japan ($6.30) -- both of which import 100 percent of their crude... The philosophy is different in oil-rich countries that subsidize fuel as a way to share the wealth and keep citizens happy. Drivers pay less than 50 cents a gallon when they fill up in Saudi Arabia and Iran. Gas is cheaper than milk in Venezuela, which spends an estimated $11 billion subsidizing gasoline... But whether it is individuals or governments picking up the tab, the fallout from exploding crude prices is being felt around the globe...