The price of crude oil is very variable. Why? Political disturbances and more recently the globalisation of petroleum commerce have made prices very sensitive to all news, good or bad, and sometimes without any discrimination. This sensitivity of crude prices is even more important for the finished products coming out of the refineries, such as petrol and diesel. But the price that you pay at the pump is a lot higher than the cost price of the products. Why this difference? It results from the fiscal policy in the consumer country. For the three major European countries (Germany, France, Great Britain), the average level of taxes levied on petroleum products represents three quarters of the selling price of the product.
More exactly, one euro worth of petrol represents today in 2005 on average:
23.5 cents of crude production cost and taxation in the producer country,
1.5 cents of crude transport cost,
3 cents of crude refining cost,
2 cents of distribution cost for the petrol,
70 cents of petroleum taxation levied by the state.
In the United States, the tax on petroleum products is only one quarter of the selling price. That is why petrol is a lot less expensive there than in Europe. Unfortunately, cheap petrol does not incite consumers to make energy savings!
The taxes on petroleum products represent between 10 and 20% of the budgets of the three major European countries. |