The Real Price of Gas

AN ANALYSIS OF THE HIDDEN EXTERNAL COSTS CONSUMERS PAY TO FUEL THEIR AUTOMOBILES

The report divides the external costs of gasoline usage into five primary areas:

(1) Tax Subsidization of the Oil Industry; Total Annual Oil Tax Subsidies:
Low estimate: $9.1 billion or $0.035/gallon
High estimate: $15.7 billion or $0.06/gallon
High (with new TRA subsidies): $17.8 billion or $0.07/gallon

(2) Government Program Subsidies; Total Annual Government Spending Subsidies:
Low estimate: $38.0 billion or $0.32/gallon
High estimate: $114.6 billion or $0.95/gallon

(3) Protection Costs Involved in Oil Shipment and Motor Vehicle Services; Total Annual Protection Costs:
Low estimate: $88.5 billion or $0.65/gallon.
High estimate: $140.8 billion or $1.05/gallon.

(4) Environmental, Health, and Social Costs of Gasoline Usage; Total Annual Environmental, Health, and Social Costs:
Low estimate: $231.7 billion or $2.00/gallon
High estimate: $942.9 billion or $8.13/gallon

(5) Other Total Annual Cost of “"Other" Economic Costs:
Low estimate: $191.4 billion or $1.59/gallon
High estimate: $474.1 billion or $3.95/gallon
Estimate w/petroleum price spike: $500.8 billion or $4.17/gallon


Important Externalities of Motor Vehicle Use.
Together, these external costs total $558.7 billion to $1.69 trillion per year, which, when added to the retail price of gasoline, results in a per gallon price of $5.60 to $15.14