Gasoline is still cheap in the U.S., relatively speaking

You don't really appreciate just how cheap gasoline still is in the U.S. until you travel abroad. On our last trip to Europe in 2005, we filled up the ten-gallon tank on our rental car at a cost of about $80 - that seemed like lot back then and still does today.

Well, actually, the part about $8 a gallon still seems like a lot.

But, $80 a tank? That doesn't sound like such an outrageous amount anymore.

Of course, those visiting the U.S. today from Venezuela, Saudi Arabia, and elsewhere probably say the same thing about fuel prices in the U.S., so, it's all relative.

This report in today's Wall Street Journal has a nice summary of fuel prices in the U.S. and in Europe. For some reason, the graphic you see below appears only in the print edition.
With a little video clip about angry truck drivers in the U.K. (where the news always sounds a bit different when delivered with a British accent) the report explains:

With gasoline costing upward of $9 a gallon in parts of Europe, protests are putting governments under pressure to cut the taxes that make up much of the price of fuel.

Hundreds of truck drivers converged on London Tuesday, jamming a major road and forcing police to divert motorists. In France, fishermen continued to block ports and oil depots, while their counterparts in Spain and Italy signaled they would join the protest. French President Nicolas Sarkozy responded by calling for a Europe-wide cap on fuel sales tax.

So far, however, the real puzzle is that the soaring fuel costs -- which make U.S. pump prices look cheap by comparison -- haven't caught fire as a major political issue in Europe. The reasons for that, analysts say, range from simple fatalism to a growing green consciousness that makes some Europeans feel they should be cutting back on car travel anyhow.

In much of Europe, taxes account for more than half of the retail price of gasoline and diesel, hence the modest increases in price as shown above which would be even less in local currency terms. That probably helps to explain why it's not as big an issue as in the U.S.

This is one case where high taxes have caused businesses and consumers to change their behavior for the better (unless of course you believe that the current recent era of cheap energy will last forever).