As Gas Nears $7 a Gallon, More Britons Take the Bus
Friday, April 28, 2006
LONDON, April 27 -- David Graham pulled up to the gas pump in his shiny black sport-utility vehicle with a "for sale" sign taped in the window.
Graham, 48, a London building contractor, pointed at the price on the pump -- the equivalent of $6.62 a gallon, which means it costs him $125 to fill his tank. "That's why this is for sale," Graham said. "I can't afford it anymore. I have to walk everywhere. Things have gone mad."
As Americans contemplate the misery of a summer of $3-per-gallon gas, drivers in Britain and much of continental Europe look on with resigned envy. High taxes long ago created some of the world's most expensive gasoline on this side of the Atlantic, where a family car is deemed more a luxury than a necessity and many people rely instead on extensive public transportation networks.
But even in Europe, where consumers are used to paying pump prices double, or more, what Americans pay, there is growing alarm over the effect of rising crude oil prices on fuel costs.
Many motorists are driving less and altering the way they shop, take vacations and carry out other routines, according to interviews and opinion polls. Many airlines, delivery services and other fuel-dependent businesses are either passing increases on to consumers through higher prices or taking deep profit cuts.
Andris Piebalgs, the European Union's energy commissioner, warned last weekend that high oil prices were "destroying economic growth" in Europe.
Kate Gibbs of Britain's Road Haulage Association, which represents truckers and trucking companies, said the prices were driving many small trucking companies out of business. "They just can't take it anymore," Gibbs said.
Uncertainty about the West's growing confrontation with Iran, the world's fourth-largest oil supplier, instability in major producers such as Nigeria and Iraq, continued fallout from Hurricane Katrina, and growing demand for oil in China and India are among the reasons analysts cite for the worldwide surge in pump prices.
Drivers in 11 European countries are now paying an average of more than $6 a gallon for gasoline, according to Britain's AA Motoring Trust. "We have always looked upon you Americans with a lot of envy" about gas prices, said David Williams of the trust, an independent research group that advocates for British motorists.
European governments have long used gasoline taxes not only as an important source of revenue, but as a policy tool to drive down oil consumption and reduce pollution.
Williams said taxes account for about 66 percent of the pump price in Britain -- so of the current average price per gallon of $6.48, about $4.27 goes to the government.
U.S. drivers pay an average of about 46 cents per gallon in combined state, federal and local taxes, according to the Tax Foundation, an independent organization in Washington.