The UK vs the US: impact of gasoline prices

[c1ue]

A simple juxtaposition of facts

Gasoline prices
UK: 1.18 per liter (London) = $7.18/gallon (1.61 exchange rate)
US: $3.88/gallon (Los Angeles)

Average MPG
UK: 38
US: 22.4

Average miles driven (cars only)
UK: 7144 (249 billion miles divided by 31 million cars)
US: 15306 (3 trillion miles divided by 196 million licensed drivers)*

* Licensed drivers used because of large number of 'hobby' cars in US; in UK there are more licensed drivers than cars (36M vs. 31M)

UK average annual gasoline spend (aags): $1,350
US average annual gasoline spend (aags): $2,650

US aags w/ 38 mpg & same gasoline price: $1,560
US aags w/ 38 mpg & UK gasoline price: $2,900

Average gasoline vs. oil price ratio, Jan 1997 to Jul 2007: 16.76 (ratio 1)
Average gasoline vs. oil price ratio, Aug 2007 to Jul 2008: 27.90 (ratio 2)
Gasoline vs. oil price ratio, 3/31/11: 27.32 (ratio 3)

US aags, all other statistics equal, oil price $150, ratio 1=gasoline price $8.95: $6,115
US aags, all other statistics equal, oil price $150, ratio 2=gasoline price $5.38: $3,676
US aags, all other statistics equal, oil price $150, ratio 3=gasoline price $5.49: $3,751
UK aags, all other statistics equal, oil price $150, ratio 3 + same US/UK ratio= gasoline price $10.16: $1,909

US aags, MPG = 38, oil price $150, ratio 1=gasoline price $8.95: $3,604
US aags, MPG = 38, oil price $150, ratio 2=gasoline price $5.38: $2,167
US aags, MPG = 38, oil price $150, ratio 3=gasoline price $5.49: $2,211

US aags, all other statistics equal, oil price $200, ratio 1=gasoline price $11.93: $8,153
US aags, all other statistics equal, oil price $200, ratio 2=gasoline price $7.17: $4,898
US aags, all other statistics equal, oil price $200, ratio 3=gasoline price $7.32: $5.002
UK aags, all other statistics equal, oil price $200, ratio 3 + same US/UK ratio= gasoline price $13.55: $2,546

US aags, MPG = 38, oil price $200, ratio 1=gasoline price $11.93: $4,805
US aags, MPG = 38, oil price $200, ratio 2=gasoline price $7.17: $2,888
US aags, MPG = 38, oil price $200, ratio 3=gasoline price $7.32: $2,948

Note how even a conversion of the entire US to UK fuel standards only keeps gasoline spend equal at oil=$200 and drops annual fuel spend 16% at oil=$150.

Note also how oil price increases leading into gasoline price increases have a far lower impact on UK gasoline spending than US in absolute terms - though of course the ratio of increase is identical.

[Fiat Currency]

Average MPG
UK: 38
US: 22.4


Just curious where you got those numbers, and if they are rationalized to a "common" gallon (US=3.78 litres UK=4.54 litres) like it appears you have done with the price?

[c1ue]

I did convert to the standard gallon, but not the 4.54 litres.

The numbers came from government statistics; US mpg I have seen firsthand while UK mpg came via: http://www.treehugger.com/files/2008/08/fuel-economy-efficiency-gas-oil-uk-usa.php

This affects the numbers, but doesn't change the results dramatically:


UK average annual gasoline spend (aags): <s>$1,350</s>$1,620
US average annual gasoline spend (aags): $2,650

US aags w/ 38 mpg & same gasoline price: $1,560
US aags w/ 38 mpg & UK gasoline price: $2,900

Average gasoline vs. oil price ratio, Jan 1997 to Jul 2007: 16.76 (ratio 1)
Average gasoline vs. oil price ratio, Aug 2007 to Jul 2008: 27.90 (ratio 2)
Gasoline vs. oil price ratio, 3/31/11: 27.32 (ratio 3)

US aags, all other statistics equal, oil price $150, ratio 1=gasoline price $8.95: $6,115
US aags, all other statistics equal, oil price $150, ratio 2=gasoline price $5.38: $3,676
US aags, all other statistics equal, oil price $150, ratio 3=gasoline price $5.49: $3,751
UK aags, all other statistics equal, oil price $150, ratio 3 + same US/UK ratio= gasoline price $10.16: <s>$1,909</s>$2,290

US aags, MPG = 38, oil price $150, ratio 1=gasoline price $8.95: $3,604
US aags, MPG = 38, oil price $150, ratio 2=gasoline price $5.38: $2,167
US aags, MPG = 38, oil price $150, ratio 3=gasoline price $5.49: $2,211

US aags, all other statistics equal, oil price $200, ratio 1=gasoline price $11.93: $8,153
US aags, all other statistics equal, oil price $200, ratio 2=gasoline price $7.17: $4,898
US aags, all other statistics equal, oil price $200, ratio 3=gasoline price $7.32: $5.002
UK aags, all other statistics equal, oil price $200, ratio 3 + same US/UK ratio= gasoline price $13.55: <s>$2,546</s>$3,057

US aags, MPG = 38, oil price $200, ratio 1=gasoline price $11.93: $4,805
US aags, MPG = 38, oil price $200, ratio 2=gasoline price $7.17: $2,888
US aags, MPG = 38, oil price $200, ratio 3=gasoline price $7.32: $2,948

The point was that the UK spends significantly less than the US per driver per year on gasoline and that the increase in gasoline costs would impact US drivers more as the relative difference in gasoline spending increases.

Another point which wasn't emphasized is that UK mpg is at least in part significantly due to its incredibly high petrol prices; when the US prices were $2, the UK was $4 - etc etc.

This leads into the third point: UK mpg has almost nothing to do with electric cars - and everything to do with small fuel efficient cars. But having the ability to not drive is also a major factor: the UK's average distance driven is far less.

Lastly for those who think the US can achieve UK mpg - it is physically going to be impossible barring a tyrannical Presidential fiat order scrapping 95% of all cars on the road and replacing them with Ford Fiesta equivalents. While it is likely some improvement will occur due to gasoline costs, the actual improved mpg number will be far closer to the existing mpg number than the UK's 38.

Thus I'd expect annual average gasoline spending to be less than $6,115/$8,153, but much higher than $3,604/$4,805 (vs. $2,650 today).

We're talking at least about a doubling of annual gasoline spend should oil reach $150 and stay there - and (another) 5% of annual income to boot.

[touchring]

Both us and uk are almost equally screwed by high oil prices. Both hk and singapore got only half a million cars, that's 1 out of 10 persons in singapore, and 1 out of 15 persons in hong kong.

[c1ue]

Both us and uk are almost equally screwed by high oil prices. Both hk and singapore got only half a million cars, that's 1 out of 10 persons in singapore, and 1 out of 15 persons in hong kong.

Again, you attempt to compare 2 cities vs. entire nations.

Please at least try to compare apples with apples.

[Fiat Currency]

I did convert to the standard gallon, but not the 4.54 litres.

The numbers came from government statistics; US mpg I have seen firsthand while UK mpg came via: http://www.treehugger.com/files/2008/08/fuel-economy-efficiency-gas-oil-uk-usa.php

This affects the numbers, but doesn't change the results dramatically:

Thanks. I like the concept of the analysis BTW.

However, according the web link you provided ...



38 -- That's the number of miles per gallon (US gallons) that the average passenger car in the UK is getting according to the British Department of Transport.

22.4 -- That's how many miles per gallon (US gallons) the average passenger vehicle in the United States is getting according to the Bureau of Transportation Statistics.

... it appears that the MPG are already BOTH in US MPG.

(1) Is that correct?

(2) Does that mean the original math was correct (sorry) ?

(3) Is it still a valid comparison in your mind ... or since everything is in $USD and US MPG ... would it be more appropriate to also compare median salaries between the UK & US in $USD to see the overall impact of fuel as a percentage of one's total gross income? (forgetting things like tax rates etc.)

I like the concept of the analysis, and think it could be fun to add in a few other countries ... but as you say, I wanted to make sure things were apples to apples.

Thanks.

[touchring]

Again, you attempt to compare 2 cities vs. entire nations.

Please at least try to compare apples with apples.


Many countries are almost made up of cities. Just take a look at Japan, where do most people live and how do most Japanese go to work and school? By train.

This is the current trend, the US and even the UK are already behind trend.

If you believe in the new world order, then oil is too cheap. Oil should be at least $200-$300 a barrel today.

[c1ue]

... it appears that the MPG are already BOTH in US MPG.

(1) Is that correct?

It is not clear both are US gallons - in fact given that the sources are the US and UK departments of transportation, it is actually very possible that the UK gallon used by the UK DoT is different. This in turn means the UK equivalent MPG is 31.64 - which seems much more sensible to me.

However, I also note on wiki that the UK imperial gallon (i.e. the 4.54 liters) is no longer used and is in fact outlawed.

Thus the original numbers apparently stand.


(2) Does that mean the original math was correct (sorry) ?

(3) Is it still a valid comparison in your mind ... or since everything is in $USD and US MPG ... would it be more appropriate to also compare median salaries between the UK & US in $USD to see the overall impact of fuel as a percentage of one's total gross income? (forgetting things like tax rates etc.)

I like the concept of the analysis, and think it could be fun to add in a few other countries ... but as you say, I wanted to make sure things were apples to apples.

Thanks.

No worries - the purpose of my putting all these numbers up and (eventually!) the sources is exactly so that others can both critique and learn.

Fortunately we also have resources to check: household spending surveys

http://www.statistics.gov.uk/downloads/theme_social/family-spending-2009/familyspending2010.pdf


Of the 58.40 pounds spent on transport each week, half (50 per cent)was spent on the operation of personal transport (2930 pounds0, see Table A2q. This was a drop of 8 per cent on the previous year, in line with the overall drop observed in spending on transport. As in 2008,petrol,diesel and other motor oils (19.20 pounds per week) was the largest expenditure in the operation of personal transport category.Total spending per week from the same report is indicated at 455 pounds, thus gasoline (and oil) costs are 4.2% of spending.

Annual spend on average for households is then $1,607 - given there were 22M households in the UK in 2001 (thus more than 1 driver per household even given a likely 7% to 10% increase), the original $1,350 aags (which is per driver) seems ballpark.

For comparison, the US household spending breakdown is: http://www.bls.gov/cex/#tables
(US has about 110 million to 115 million households)


<table border="0" cellpadding="0" cellspacing="0" width="403"><col width="334"><col width="69"><tbody><tr height="46"> <td class="xl66" style="height: 34.5pt; width: 251pt;" width="334" height="46">Item </td> <td class="xl66" style="border-left: medium none; width: 52pt;" width="69">All consumer units</td> </tr></tbody></table><table border="0" cellpadding="0" cellspacing="0" width="403"><col width="334"><col width="69"><tbody><tr height="17"> <td class="xl65" style="height: 12.75pt; width: 251pt;" width="334" height="17">Average annual expenditures</td> <td class="xl66" style="width: 52pt;" width="69">$49,067</td> </tr></tbody></table><table border="0" cellpadding="0" cellspacing="0" width="403"><col width="334"><col width="69"><tbody><tr height="17"> <td class="xl66" style="height: 12.75pt; width: 251pt;" width="334" height="17"> Gasoline and motor oil</td> <td class="xl67" style="width: 52pt;" width="69">$1,986</td> </tr></tbody></table>US spending on gasoline is thus 4.04% - lower than the UK

Looking then at historical gasoline prices from: http://www.theaa.com/motoring_advice/fuel/fuel-price-archive.html

March 2006 unleaded petrol in the UK:0.900 pounds per liter
March 2011: 1.329 pounds per liter
an increase of 47.7%

In comparison
http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_history.html
March 2006 unleaded gasoline in the US $2.479
March 2011: 3.538
an increase of 42.7%

However, notice that there are some major discrepancies between different facets of the US data.

Not all the data sets are equal, and numbers are unlikely to exactly match, but the UK data seems consistent.

The US data, however, shows either a radically wrong total number of miles traveled or a dramatically low household spending number.

For example: let's assume the 38 UK mpg is correct. This translates to a cost of $0.2128 per mile (using theaa.com price of 1.329 pounds/liter, 3.78 liters/gallon).

Total UK car miles driven = 249 billion * 0.2128 / 24 million households = $2,207 per household

This is 37% higher than the household survey, but then again there is certainly at least some business level driving in the total annual numbers.

US: 22.4 mpg @ $3.538/gallon = $0.1579
3 trillion car miles driven * .1579 / 115 million households = $4119

This is 107% higher than the household survey - and represents a huge discrepancy.

[c1ue]

Many countries are almost made up of cities. Just take a look at Japan, where do most people live and how do most Japanese go to work and school? By train.

This is the current trend, the US and even the UK are already behind trend.

If you believe in the new world order, then oil is too cheap. Oil should be at least $200-$300 a barrel today.

Most modern nations are heavily urbanized, but that is still hugely different than actually just being a city.

According to: http://www.indexmundi.com/japan/urbanization.html


Urbanization: urban population: 67% of total population (2010) Comparatively Singapore: http://www.indexmundi.com/singapore/urbanization.html


Urbanization: urban population: 100% of total population (2010) Hong Kong: http://www.indexmundi.com/hong_kong/urbanization.html


Urbanization: urban population: 100% of total population (2010) Quite a significant difference.

[GRG55]

Again, you attempt to compare 2 cities vs. entire nations.

Please at least try to compare apples with apples.

Comparing the USA, a geographically massive country, with the UK is hardly comparing apples with apples...

[c1ue]

Comparing the USA, a geographically massive country, with the UK is hardly comparing apples with apples...

Sure, except the purpose was to look at how gasoline prices would affect the population of each nation - not to make a value judgment on anything else.

Density of UK: 58 million / 242000 square km = 240/km squared
Density of US: 307m / 9629091 = 32/km squared
Density of Singapore: 7148/km squared
Density of Hong Kong: 6349/km squared

The latter 2 are more than 190x as dense as the US, and more than 25x as dense as the UK.