Blogtrek

How much petrol tax?

I noted today from the Internet that the price of petrol in Great Britain is 54 pence per litre. Further, they said that all but 17 pence is tax. What does this mean in American terms? First, there are 3.78 litres in a gallon, so 54 pence per litre is £12.08 per gallon of petrol. Apply the exchange rate from above (sorry, 208 is not a Fibonacci number) and the result is $3.29 per gallon of gasoline. The actual price in America now is $1.30 per gallon, so we really have it cheap. Further, 37 pence is tax, so the amount taxed is 37 * 3.78 pence or £1.39, approximately. This is $2.25. So the British have a $2.25/gallon tax on their petrol. Our tax is perhaps 25 cents. Hence a $2/gallon tax on gasoline will make us on par with the British. It would also encourage conservation and development of renewable fuels. So why don't we do it? We could cut some other tax to make up for it; perhaps the income tax, creating the principle that a person should be taxed on how much fuel he consumes, not on how much money he makes.

Incidently, I prefer the British word petrol to the American word gasoline for vehicle fuel. This is because it is not ambiguous. Americans shorten gasoline to gas, which can be confused with another fuel, natural gas.