Where is Gasoline the Most Affordable?

Remember it's the time price, not the money price, that counts.

According to GlobalPetrolPrices.com, the average price of gasoline around the world is U.S. $5.03 per gallon. However, there is substantial difference in these prices among countries due to the various taxes and subsidies for gasoline. All countries have access to the same petroleum prices of international markets but then decide to impose different taxes. As a result, the retail price of gasoline is significantly different.

The money price of 16 selected countries ranges from $2.26 in Russia to $8.55 in Denmark. But what about the time price? To calculate the time price we first calculated the GDP per hour worked in each country. The data to calculate this ratio comes from the World Bank and the Conference Board.

We then divided GDP per Hour Worked by the money price per gallon. This gave us the gallons of gasoline one hour of work would buy in each country:

We also divided the nominal price per gallon by GDP per Hour Worked to get the minutes required per gallon:

This chart illustrates how much more expensive the other 15 countries are relative to the U.S. in terms of time price:

Of the 16 countries analyzed, the U.S. is by far the most affordable place to buy gasoline. There are other countries where gasoline is more affordable, but the price is heavily subsidized by government.

Tip of the Hat: Jeremy Horpendahl

We describe the process of transforming scarcities into abundances in our new book, Superabundance, available at Amazon. You can read more about the book at superabundance.com. There has never been a better time to create more life.

Gale Pooley is a Senior Fellow at the Discovery Institute and a board member at Human Progress. “Gale Pooley is the world’s leading authority on time prices.” - George Gilder.