Would you believe that Norwegians are paying $6.66 a gallon for gasoline? Most
of them pay it with barely a whimper, although the Norwegian Automobile Association has said, “Enough is enough.”
Two-thirds of that high price is in taxes, imposed in a deliberate effort to hold back gasoline consumption, The New York Times reported from Oslo.
It noted that Norway is the world’s third largest oil exporter, behind Saudi Arabia and Russia. Yet Norway is the only oil-rich country that tries so hard to curtail the use of gasoline.
Compare Norway’s $6.66 a gallon with the current average of $2.26 in the United States. Compare, too, Norway’s 1.9 gallons per person per day consumption rate with the U.S. rate of 2.9, according to a Times tabulation.
Norway’s low consumption is due partly to its high gasoline tax but also to a low rate of car ownership and the fact that most of the vehicles are fuel-efficient rather than gas-guzzling sport utility vehicles and pickups. That last bit isn’t by accident. Norway taxes each car up to $395 a year and Oslo has a tax of $160 a year on a car with studded tires. Also, Norway has no automobile manufacturing industry and taxes SUVs at a higher rate than compact cars. The Times says that a Toyota Land Cruiser that costs $60,000 in the United States could sell for $100,000 in Norway.
A right-wing party in the Norwegian Parliament, the Progress Party, keeps calling for a reduction in gasoline prices. But the government sticks to its policy of using the tax revenues to support social benefits. A senior research economist at the Institute of Transport Economics in Oslo said in the news story, “Our government has been grateful to use the automobile as a supreme tax object.”
In contrast, the United States had the cheapest gasoline prices of 27 major industrial countries, according to a recent survey by the International Energy Agency. It said taxes account for only 20 percent of the price of gasoline in the United States.
If President Bush really wanted to make the United States energy independent, he could risk heavy opposition from U.S. oil companies and automobile manufacturers by pressing for more energy-efficient vehicles, instead of concentrating on how to reduce the price at the pump.
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