Gouging At The Pump
(Part 2 of 2)

The gouging at the pump continues worldwide, but is perhaps being most felt in Europe, where the confiscatory taxes of the European Union are pricing a gallon of gasoline out of reach for the average consumer. The Europeans are not taking this lying down either. Protests and roadblocks were set up in Belgium, the Netherlands, Germany and France. In France, the government offered rebates on gas taxes to appease angry consumers.

In Great Britain however, things are getting particularly nasty, where fuel prices are at $1.30 a liter, which translates to $4.99 per US gallon. Media coverage of the situation in Britain prompted panic buying and as a result, half of the gas stations in England, Scotland and Wales are bone dry.

Deputy Prime Minister, John Prescott, warned that "chaos . . . seems to be developing across the country, where emergency services are being denied to people." After all, ambulances are idle, delivery trucks are going nowhere, and for the gas stations that are still open, you can bet that they have jacked their prices way up to comply with the demand of those willing to pay.

To make matters worse, Prime Minister Tony Blair has stated that he won’t give in to public pressure and lower fuel taxes. In Canada and the United States, there is a sticker on every fuel pump stating how much of the price at the pump is made up of taxes. In the United States, it averages a combined total of 27 cents per gallon of federal and state taxes, which comes to 18% of the price. In Canada, it averages 24.7 cents per liter along with the much hated 7% Goods and Services Tax (GST) and these taxes constitute 34% of the purchase price.

In Great Britain, the government refuses to put tax disclosure stickers on their pumps because the taxes comprise 80% of the purchase price, and they know that if the stickers went up that there would be rioting and bodies littering the streets. Look no further than Jamaica and the efforts of the government there to raise prices about a year or so. They jacked up the price of gasoline there, and rioting and bloodshed there became so intense that the government backed down.

Oil companies are wise not to put their delivery truck drivers at risk by having them go to the refineries to pick up gasoline for delivery, and the police are wise not to interfere with the protesters. To move against them would be a public relations nightmare for both the police and for Tony Blair’s reelection chances.

With the coming onset of winter in the Northern Hemisphere, we in both North America as well as Europe need to conserve our fuel as best as we are able and to combine as many trips as possible. We also need to reduce our dependence on foreign oil, particularly from the OPEC cartel. It would also help if there were more incentives provided to make for more fuel-efficient cars. Such can be done without sacrificing either comfort or safety.

Perhaps it is time that we as a people took this problem of rising fuel prices more seriously and took the appropriate action. We can suggest to our elected officials that perhaps lowering the federal taxes on gasoline can help, even if temporarily. If we band together enough, we can bring about another crashing of the oil market like was done in the mid-1980’s. If it can happen once, it can happen again.

And not a moment too soon.

You can e-mail your comments to Timothy at trollins@idirect.com.

Copyright © 2000 by Timothy Rollins.
All Rights Reserved.

-Published with permission