If you think gas prices are scary here...

Arie, a reader from the Netherlands, dropped me an e-mail over the weekend:

"On June 5 you reported that gas prices in your area had soared to $4.36 per gallon for regular. However, this price is still a bargain compared to the prices that must be payed in Europe....Although in the view of these prices some people start looking for alternatives, most of them are still using their cars."

He has a point. Here's the latest average price (in U.S. dollars) for a gallon of premium gas in several European nations, as recorded by the U.S. Energy Information Administration:

Belgium: $9.20
France: $8.80
Germany: $8.93
Italy: $8.93
Netherlands: $9.89
United Kingdom: $8.74
United States: $4.20

--Steve Hymon

Comments

[Jonez]

About all the talk about oil production peaking and greater demand from China and India, there are other viewpoints out there, Take for instance Bill Engdahl (30 yr vet. macroeconomist) who goes into great detail explaining why the huge oil prices are primarily speculatation created by manipulation and extremely bad government regulation of things like futures look-alikes. He also says that world oil supply is not peaking and explains why in depth. ....Lots of differing opinions about these issues out there. Wonder which is true. Me, hey I'd love to live next door to my job and walk to work. I hate the freeway. If gas prices go a lot higher guess I'll have to find a way to do that. And if all of this prompts the changes we've needed in this country for a long time then so be it. It wont come without pain, of course.

[Mauricio Galvão Anderson - Atibaia - SP - Brazil]

Prices in the US are still very cheap! In Sao Paulo, premium gas (petrobras podium) sells for $ 6.87. On the other hand, Ethanol sells for about $2.72. 80% of new cars run with both or either fuel. Smart thinking. The US should have a programme directed to biofules, but not with corn based ethanol. This just puts money into farmers pocket.

[Jaime]

Does anyone know why gas is .14 (fourteen) Cents per gallon in Venezuela? Is Chavez paying for everyone's gas and how does he do it? Venezuela has the most Mrs. Universe winners in the world any correlation?

[PAUL]

The solution to the oil crisis is simple.
Bring back the Emergency Highway Energy Conservation Act of 1974, which enacted the 55 M.P.H. National Maximum Speed Limit.
When Gas was around a buck no one cared but now it is almost $5.00
I use the cruise at 55 on my Toyota Prius on the freeway. I thought the Prius already had an amazing gas mileage of 45 M.P.G. but I was shocked that I can get 66 M.P.G. by simply cruising at 55 M.P.H. instead my usual 70 M.P.H.
Can you imagine even if 10% of the people did that how much oil we could save.

[Sean K]

Adoptive father: I hope the only thing you've adopted is a pet, because with your right-wing slash and burn mentality, your adopted children aren't going to have much of a future.

[Thibault H.]

I'm curious why Americans keep comparing gas prices with western Europe. L.A. is on the Pacific Rim. I think it would be also a good idea to compare gas prices with the rest of East Asia--Japan, Hong Kong, Singapore, Taiwan, South Korea. etc. You know, it takes much less time to get to East Asia from the West Coast of the U.S. than to Europe.

[Baggins]

Mother Russia has lots of oil for europe.

[adoptivefather]

Ladies and Gents

Your government is about to begin an assault on oil company profits. The politicians fail to realize that the oil companies are public companies owned by shareholders. Every one of you is either directly or indirectly impacted through your investments. Do you own a mutual fund?

Politicians are ranting that the profits made today by oil companies are outrageous yet do you realize that ExxonMobil's profit margin at today's very high oil price is only 11%? Is 11% too much profit?

XOM data
Market Cap (intraday)5: 465.02B
Enterprise Value (10-Jun-08)3: 439.23B
Trailing P/E (ttm, intraday): 11.50
Forward P/E (fye 31-Dec-09) 1: 9.55
PEG Ratio (5 yr expected): 1.11
Price/Sales (ttm): 1.21
Price/Book (mrq): 3.82
Enterprise Value/Revenue (ttm)3: 1.13
Enterprise Value/EBITDA (ttm)3: 5.744

FINANCIAL HIGHLIGHTS

Fiscal Year
Fiscal Year Ends: 31-Dec
Most Recent Quarter (mrq): 31-Mar-08


Profitability
Profit Margin (ttm): 10.85%
Operating Margin (ttm): 16.45%


Management Effectiveness
Return on Assets (ttm): 16.63%
Return on Equity (ttm): 35.59%


Income Statement
Revenue (ttm): 389.30B
Revenue Per Share (ttm): 71.697
Qtrly Revenue Growth (yoy): 35.40%
Gross Profit (ttm): 171.70B
EBITDA (ttm): 76.47B
Net Income Avl to Common (ttm): 42.22B
Diluted EPS (ttm): 7.692
Qtrly Earnings Growth (yoy): 17.30%

If you want to understand the oil situation you need to look at real underlying numbers and not just rant about speculators.

The people of the US are being exposed to huge risks based on declining oil production in the face of ever increasing population. Picture a water hole in Africa with more and more animals showing up as the summer heat evaporates water from the hole.

That is what we face in America today. No amount of windfall profits tax with alter it. We must control population and increase production.


1970 2007
Barrels of oil produced per day in US 9,600,000.00 5,000,000.00
US population 200,000,000.00 300,000,000.00
Gallons of oil produced per person 2.02 0.70

In 1970, I lived with my parents and 6 brothers and sisters. The US was producing a little over 18 gallons of oil per day to support our way of life. Today that same family of 9 people would only have 6 gallons of oil produced. That is 12 gallons per day missing from supply for a 9 person family today vs 1970. And the number is of missing gallons is increasing every year.

Up till now we have made up the shortfall by importing from other countries. Now we are upset because the demand we place on those sources is competing with demand from China, India and others and prices are rising.

Here is some perspective. The 20 million illegal aliens in the US today create demand for oil that must be imported of almost 1.5 million barrels per day!!

[PEN]

Well, If I lived in Europe my paycheck would probably be larger (in U.S. dollars) than it is in the U.S. so the price of gas would probably even out.
Bush owns alot of stock in Oil so I think for the past couple years he has been letting them by with this so he can fill his bank account for all his great great great great great grandchildren! If gas continues to rise I am afraid we are going to see alot of stealing, robbing, and killing going on for money. It is pitiful that the U.S. is going downhill so badly. I worry about what things will be like for my child and his children. GO BUSH!!

[Dan Wentzel]

It seems that ever-increasing gasoline prices are forcng some people into reasonableness. There is no divine entitlement to an automobile-based lifestyle, especially in an urban environment.

Gasoline prices will never be what they were... ever. With China and India increasing their demand, there just isn't the supply.

If economic forces in time and money are forcing people to 1) move closer to work; 2) work closer to home; 3) drive less; 4) take public transit, too bad.

The car culture, where everyone felt entitled to and expected to drive and park a single-occupancy vehicle anytime, anyplace, anywhere, on-demand, conveniently and cheaply, in all parts of Southern California, is rapidly unraveling was never economically or environmentally sustainable.

With three million more people expected to migrate to Los Angeles County over the next three years this means only one thing -- DENSITY.

Increased density is inevitable. As the economic and environmental limits of sprawl have been reached, this will responsibly require recentralization along major transit corridors.

The ONLY question on offer isn't whether Los Angeles' car culture will unravel. It's whether we will build the comprehensive transit system to keep it sustainable.

The unraveling of the car culture doesn't not mean everyone will give up their cars. Cities with world class transit systems like New York, London, Paris, Tokyo, etc., also have choking congestions. However, they have a viable alternative.

This will change EVERYONE's lifestyle, whether they choose to (or think they are too good to) use public transit or not. People will no longer be able to count and expect, that even if they want to use their car, that the people they meet in their professional and social engagements will be willing to do the same. Instead of picking an out of the way meeting place, people will meet in transit friendly locations. Businesses which left the urban core for cheap land and plenty of parking will move back to urban areas and transit corridors so their employees and customers can reach them. (The decision of the non-altruistic NBC/Universal Corporation to move its operations from it's car-based location to the Universal City Red Line station is a sign that they know which direction they are headed.)

People who want to maintain a traditional, low-density, automobile-based suburban lifestyle will have to do it in the actual suburbs, no in the middle of Los Angeles. Los Angeles can no longer sustain a suburban-within-urban lifestyle for everyone.

Be angry at the messenger if you want, but I'd vote for the first local politician with the courage to tell the truth.

"The Los Angeles car culture as we have known it for six decades is unraveling and we can no longer guarantee or expect or subsidize an automobile-based lifestyle for everyone. We will have to invest as heavily and with the same zeal in our public transit infrastructure over the next six decades as we invested in roads and freeways over the last five."

That person has my vote!

That Los Angeles' "DNA" is changing is inevitable and much of the pressure that is changing its DNA is beyond our control. The only debate is whether we will have a corresponding investment in our public transit infrastructure to keep Los Angeles economically and environmentally sustainable.

But the glory days of the "car culture" and solo-occupancy motoring are LONG behind us and there is no going back.

[Mike]

I've said it before and I'll say it again: I don't care what Europeans are paying. I don't live there and don't plan on moving any time soon.

I do have relatives there and while their fuel costs have gone up it hasn't been nearly as bad as it has been here. Also in places like England 70% of the cost of fuel is taxes, but they need to pay for the roads and NHS (National Health System) so how.

[dw]

It's a false comparison.

First, you used premium which is a very small percentage of total sales.

Second, you didn't deduct taxes. Different allocations of taxes in Europe and the US make the comparison meaningless.

[Mary Ellen]

Obviously you mustbe in that 70% of Americans who have never set food outside of the U.S. (except possibly Mexico and then you were confined to a resort) so please start verifying your statements BEFORE publishing!
This is the problem with today's journalism - everyone published everything regardless of validity!

[Mary Ellen]

As mentioned, you fail to state that Europeans DON'T DRIVE GAS GUZZLERS as 60% of Southern Californians do!
And everone lives relatively close rather than the 30+ miles apart as everyone here!

[Andrew]

Just a quick comment. Yes gas is $10 per gallon but European cars get twice the gas (or diesel) mileage, and places are much closer.

I just got back from working in Amsterdam for 10 days. What a great city. I could walk across the city in 1/2 hr or take the very efficient tram system.

I rented a car (a tiny Renault Clio), criss-crossed Holland and Belguim for the weekend and gas cost me $60.

I have to drive up to Portland this weekend from LA and it will probably cost over $600.

There is no easy answer but importing cool diesel cars and vans like you see in Europe would be a start.

[Robert Laughing]

THE bottom line is...no matter how Congress screws us, and rewards CEOs and their corporations, (a few years ago, Congress gave Pig Oil, HUGE incentives/tax breaks etc) you still put the same no-good Sons Of Bush back in office. What message do you send when you say 'You're doing a great job, politician?' Could it be...'KEEP ABUSING ME, I LIKE IT?" Look at the mayor, DA, supervisors - it's a life-long career of taking money, and free trips, special favors for the wife and kid...and the lobbyists are everywhere.

[Steve]

Please, any one of you whose says things like .."they get free medical care in other counties".. repeat after me--- NOTHING IS FREE. They do not get free medical care. Someone is paying for everything, medical care, lower housing costs, roads,..everything. We are all taxed by agovernments who uses 70% or so on admin. costs. So, let's stop with the ..it's ok because it's free. It costs us dearly.

[Al Gibbs]

I wonder how soon we Californian start paying $6 a gallon. I think it is around the corner. Europeans pay roughly double what we pay for gas, and I know that most European companies compensate for gas expense if an employee needs to drive to go to work. We soon need that too.

[Stu]

The solution is simple....bring ALL U.S. troops home from the middle east TODAY. Let them PAY us with oil. Why waste tax dollars protecting people who don't like us anyway.

[Jean-Pierre]

OK You are right Christ but don't forget ,please, your "american way of live" and the fact that you are with "car addiction" . Here in France diesel is even more expansive, so a lot of people are obliged to byke, to walk, to trip with public SNCF. May be a new live's organisation is possible, no?

[Franz Braun]

Do you conservatives have any ideas of your own? Or do you get all of your talking points from FoxNews? The US consumer won't see a drop of oil from Anwar if it was opened up to exploration now for at least 8 years from now. How is that going to help the US economy in the short-term? There are 2 factors that are driving the high prices: 1) Oil companies are able to sell 100% of their product daily because the US has a capacity problem. We can't refine enough oil for our market right now. 21% of refining gets done by Venezuela. If the US were to build tomorrow the refinery would not be operational for at least 2 years. 2) market speculation is the other problem. Hedge fund managers are dumping lots of money into petro stocks and the purchase sweet cruel which is driving up prices because OPEC won't increase supply.

The short -term solution to high gas prices is to conserve. Carpool and consider using public transportation. It's only a matter of time before law makers propose legislation that will give tax credits for individuals who do this. Purchase vehicles that get high MPG. Stop watching Fox News and do your own research online. Demand that the candidates start getting specific about energy. We need a President that will challenge the US to become energy independent within 10 years. If this country can send a man to the moon in 10, we should be able to accomplish this task. We need to study the Brazilian energy policy, the US might learn a thing or two from a developing country.

[J. Powell]

Everybody keeps claiming that we need to raise the taxes, but why? California already has the highest tax on gas in the continental U.S.
(http://www.energy.ca.gov/gasoline/statistics/gas_taxes_by_state_2002.html)

Maybe we should utilize the money we already get instead of clambering for more and then failing to use it properly.

[Chris]

The ones who say we should drill offshore and in ANWAR, I feel sorry that Bush has brainwashed you. You are by no means free, your owners are Exxon, Chevron, BP, Halibuton, whoever you lender is, and the US government.
I see that many of you have cited the fact that the Euro has skyrocketed, my wife's family lives in Europe, it is by no means "skyrocketing." What really is happening but no body wants to admit it is that the economy in Europe is strong, the US economy has been and is growing weaker as you can see the value has declined against MANY currencies(I am kicking myself for no investing in Canadian dollars). The weak US economy is causing the value to decrease, plain and simple.
Gas prices in the US are lower than in Europe for a couple reasons: 1. we have a higher refining capacity to make gasoline from crude oil. 2. our govt/army/big oil corporations have long exerted their muscle on weaker countries(Saudi Arabia, Latin America, etc.) to allow our oil companies to have unlimited access to their natural reserves and to send in our army if any conflict arises.
In closing, the last cause of rising oil prices(which are dictated by supply and demand on the mercantile exchanges) is the fact the two very large customers have stepped in(China and India) and need oil to run their economies, which were started by US companies outsourcing in those regions.
As you can see, everything has come full circle, the ones to blame are ouselves for letting the elite of America run our country and abuse of our people.

[Concerned]

What will happen when people can't afford to get to work? Or afford to transport food and other goods? Will the U.S. come to a screaching halt? With all this negative news about the economy, wars, and world-wide natural disasters, I feel like we're all facing the end of the world!

[Matt]

Bike.
Walk.
Take public transit.
(and then the environment for all three will improve)

Don't be scared, you are not alone.