As gas prices in the U.S. continue their steady march upward, the news is filled with stories about the way that it's changing our lives. As we hear every night, people are finding cheaper ways of getting to work, cutting down on trips to the grocery store, buying locking gas caps, and even refitting their cars to run on vegetable oil. Viewing all this rapid change, it's hard to imagine how people would respond if the price of gas rose to, say, $8.70 per gallon. However, that is the average price for gas in the European Union.
In the United Kingdom, diesel fuel now costs $11.50 per gallon, while it costs $8.54 a gallon in France. Regular gasoline is just as bad: in France, it's going for $8.67 per gallon, which is just below the Union-wide average. Part of the reason for this high cost is the increasing price of gasoline; because gas is traded in dollars, it has inflated worldwide. In fact, were it not for the euro's considerable strength against the dollar, gas prices would be much, much higher.
Another part of the reason for the huge gas prices is the EU's heavy tax on gas. While taxes only account for about 11% of gas prices in the United States, they make up approximately 70% of gas prices in the European Union. France's Nicolas Sarkozy has proposed a reduction/removal of Europe's value added tax, or VAT, which would cut gas prices by approximately 20%. Unfortunately, because of the structure of the EU, doing so will require the unanimous approval of all member states. Moreover, there is every likelihood that this tax reduction would only encourage gas suppliers to raise their prices still further.
Lest we feel too much pity for our European brethren, it might be worth noting that, unlike us, they have an outstanding public transportation infrastructure. When I went to Europe a couple of years ago, I traveled all around by train; my biggest single trip was from Krakow, Poland to Amsterdam. The train was fantastic. It hit every major city in the continent, offered very comfortable accommodations, gave me free snacks (at least in Poland), and was much cheaper than flying.
When I got to each city, I found the internal transportation structure to be outstanding as well. Krakow was served by a few bus routes and a first-rate tram line, both of which were incredibly cheap. The same went for Berlin and Munich, whose train lines were very orderly, clean, and effective. Even Amsterdam, with its difficult canals, had an outstanding public transportation grid.
A few days ago, I was talking to an official in New York's Metropolitan Transit Authority. He told me that, while Germany has a car culture much like America's, the average person uses public transportation for the majority of his or her travel. Europeans view public transportation as a given, something that a responsible society automatically provides to its citizens.
Admittedly, companies like Bolt Bus and the Chinatown Bus are beginning to provide a low-cost alternative to automobile and airline travel, but it seems odd that something this important is being dealt with in such a patchwork manner. As the United States moves inexorably toward $6 a gallon gasoline, it's worth asking whether we can afford to leave our interstate public transportation in the hands of Amtrak, airlines, and the occasional bus company.
Bruce Watson is a freelance writer, blogger, and all-around cheapskate. Having taken Amtrak a couple of times, he's decided that it's safer and more reliable to travel by rickshaw.