Tuesday, January 11, 2011

UK Gasoline Prices Hit £5 per Gallon—$7.76 American

The Hourly G is not a place where we beat a horse to death . . . actually, it is a place where we beat horse dead. Hey, beaten horse makes for better hamburgers.

Inflation in the UK: UK gasoline prices are soaring on a combination of increased fuel taxes and higher VAT (value added tax, for those Americans who don’t know—but should get to know, since a lot of people are saying an American VAT might be one way to close the budget deficit).

Recent prices for unleaded are at 128p a liter, the equivalent of £4.84 a gallon, while diesel fuel is at 132p a liter, the equivalent of £5 a gallon—in other words, $7.51 and $7.76 per gallon respectively. Source here, (but discount a trivial arithmetic error in the headline).

Compare that to current average prices of gasoline in the US of $3.00 to $3.20, source here—less than half the UK’s fuel prices.

This goes back to UK inflation. Pundits will claim that the UK puts a lot more duties and tarrifs and taxes on gasoline that the United States does—which is true: See the chart.

Breakdown of UK gasoline prices
as of 2008; VAT now 20%.
However, the inflation rippling through the British economy will eventually hit the United States. Rising commodity prices don’t affect just some people over here, but not other people over there in the Global Economy.

Perhaps the fact that the United States skirted the Asian Crisis in the late Nineties pretty much without a nick or scratch has given Americans a false sense of confidence that what happens elsewhere does not affect them here?

Because rising commodity prices will affect everybody—without exception. And we’re going to be seeing it this winter.


  1. 1 UK gallon = 4.546 litres

    Therefore a gallon of diesel @ £1.329 per litre costs £6.04.

    Horrible isn't it!?

    Keep up the posts I enjoy both blogs.


  2. A-ha! I thought the paper just got the math wrong.

    A US gallon is 3.78 liters. And I used American gallons to US dollars—so all is coo, no harm no foull: My argument is valid.


  3. I lived in England for the better part of 35 years, and while I agree that fuel prices are high in comparison to the USA, citizens in the UK are better off.

    Here is my argument:

    Most vehicles you see driving around American roads are gas guzzlers, and in most instances have only one occupant (the driver)
    Link here: http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html
    In England the average Joe drives a fuel efficient car, a Ford Fiesta (60.3 MPG), VW Lupo (80 MPG) Renault Clio (65.7 MPG)
    Link here: http://fuel-economy.co.uk/stats.shtml
    My chosen car was a VW Passat Diesel 1.9 TDI. I would average 50 mpg.

    Everything in England is closer; one does not need to use the car for a visit to the post office, doctors or local stores.
    In the USA almost everyone drives to stores, post offices.
    If we take the average American car and assume its gets 22.9 MPG and the tank size is 18 gallons @ $3.10 that equals $55.80 or £35.72
    Now take the average English car and assume it gets 55 MPG and the tank size is 18 gallons @ £4.84 that equals £87.12 or $138.52
    UK car gets 990 miles from his full tank
    USA car gets 412.20 miles from his full tank
    So for the USA car to get 900 miles from a tank full of gas, it would cost $134 to complete 990 miles.
    A tank of gas in the UK would last me a month because I didn’t have to drive a vast amount of miles to do daily activities. In the USA I am lucky if a tank of gas gets me through a week.
    And yes, I am aware of all those comments: “Who wants to drive one of those little cars”
    Well Americans, you just might have to if gas (petrol) goes to $5 a gallon in the near future.
    Link here: http://gm-volt.com/2010/12/30/former-shell-president-predicts-5-per-gallon-gas-by-2012/

  4. Andy- A US gallon is 3.78 liters, a UK gallon = 4.546 litres. Most U.S. sedans now get 30MPG highway using the U.S size gallon of fuel. Not as bad as you portray. It is legal to buy smaller cars there too. To boot, the average U.S. income is larger than in the U.K. (sorry).
    It is a good thing the English are not running the U.S. or yes, then they couldn't afford to drive to work!

  5. Please realize that when you are talking about a US vehicle getting 30mpg vs a british vehicle getting 65mpg you aren't taking into consideration the difference in the amount of fuel per gallon. Also, you assume the average UK car gets 55mpg but assume the average US car gets 22? The average US passanger car is actually 25.5mpg (US gallon) Which would be around 33mpg (UK gallon). Average UK car is 37.8mpg (UK gallon). So it's really not that far off.

    Also remember, the US is how many times larger than the UK? In perspective, I live in the Bay Area in Northern California. The Bay Area is about 9,000 sq miles. The entire land mass of the UK is around 90,000 sq miles. The Bay Area is a metropolitan area that I used to drive a delivery truck through and around all day long. A very typical commute in the US is 40+ miles each way, because the land is so spread out.

    And oh by the way, there are only about 62 million people in the UK whereas there are over 350 million Americans.


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The cult of stability is a culture of death.