During the past week, the average U.S. price of gasoline fell by 15 cents to $4.52. Meanwhile, at $3.99, the most common gas price was even lower.
Taking the next step, we can look at global gasoline prices to judge how well we are doing.
Global Gasoline Prices
Imagine that you drive a 2010 Toyota Camry, have $40 to spend on gas, and get 32 miles to the gallon.
How far you can go? It all depends on where you live.
Among high income countries, $40 will get you the farthest distance in Japan and somewhat closer to home in the U.K.:
With Venezuela the cheapest and Hong Kong the most expensive, the price of gasoline ranges from $0.08 cents a gallon to $11.45. The irony though is that gasoline is virtually unavailable in Venezuela. Knowing that economists define cost as sacrifice, in Venezuela, it could cost you 24 hours to locate a station and wait in line to fill your tank.
Next, I wanted to share some actual gasoline prices. From a 168 country list, below, I’ve included the 10 cheapest and the 10 most pricey. Meanwhile, starting with the cheapest, the U.S. is #64, At $4.915 it is far less than the $5.45 average world price.
The Least Expensive 10:
The Top 10:
Our Bottom Line: Elasticity
Elasticity is the demand concept that recognizes how each of us responds to a change in price. If that response is minimal, as with medication, then our price elasticity of demand is inelastic. We want those pills no matter how much we have to spend. At other times though, we are price sensitive. More elastic, our willingness and ability to buy a gallon of gasoline plunges when cost is up.
Now, with price close to $5.00, some of us are displaying more elastic demand by driving less.
My sources and more: While I was able to find a slew of sites with gasoline prices, The Washington Post had the perfect approach. While I copied just one of their graphs, do go there to see much more. Then, the perfect complement was the Global Petrol Prices up-to-date website. After that and finally, I went to CBS News for the prevalent price and this source for my Venezuela facts. (Our featured image is from The Washington Post.)
Please note that some sentences in “Our Bottom Line” were in a past econlife post.