Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

The $6.66-a-Gallon Solution
The New York Times ^ | April 30, 2005 | Simon Romero

Posted on 04/30/2005 7:02:14 AM PDT by pjsbro

OSLO, April 23 - Car owners in the United States may grumble as the price of gasoline hovers around $2.25 a gallon. Here in Norway, home to perhaps the world's most expensive gasoline, drivers greeted higher pump prices of $6.66 a gallon with little more than a shrug.

Yes, there was a protest from the Norwegian Automobile Association, which said, "Enough is enough. "

And a right-wing party in Parliament, the Progress Party, once again called for a cut in gasoline taxes, which account for about 67 percent of the price.

But "those critics are but voices in the wilderness," said Torgald Sorli, a radio announcer with the Norwegian Broadcasting Corporation who often discusses transportation issues. "We Norwegians are resigned to expensive gasoline. There is no political will to change the system."

Norway, the world's third-largest oil exporter, behind Saudi Arabia and Russia, has been made wealthy by oil. Last year alone, oil export revenue surged 19 percent, to $38 billion.

But no other major oil exporter has tried to reel in its own fuel consumption with as much zeal as Norway. These policies have resulted in Norwegians consuming much less oil per capita than Americans - 1.9 gallons a day versus almost 3 gallons a day in the United States- and low car ownership rates. On city streets and rural roads, fuel-efficient Volkswagens and Peugeots far outnumber big sport utility vehicles.

[Norway's gasoline policies stand in contrast to those in the United States, where President Bush made cheaper gasoline a priority during his discussion of energy policy at his news conference on Thursday.]

Gasoline, of course, is not the only expensive commodity in Norway, a traditionally frugal and highly taxed nation. At a pub in Oslo, for instance, a pint of beer might cost the equivalent of $12 and an individual frozen pizza $16. But expensive gasoline is rare among large oil-producing countries that often subsidize fuel for their citizens. Gasoline prices in Norway - with a currency, the krone, strong in comparison with the dollar - have climbed 30 percent since 1998, outpacing a 15 percent increase in the consumer price index in that period, the national statistics bureau said.

Having the world's highest gasoline prices is just one strategy to combat greenhouse gases in this redoubt of welfare capitalism and strict environmental laws. Overall energy consumption, especially of electricity, is quite high, however, with Norway blessed with not just oil but ample hydropower resources.

Norway not only taxes its gasoline. Norwegians also pay automobile taxes as high as $395 a year for each vehicle, and in Oslo there is even a "studded-tire" fee of about $160 for vehicles with all-terrain tires that tear up asphalt more quickly in the winter.

Then there are the taxes on new passenger vehicles that can increase the price of imported automobiles. Norway has no auto manufacturing industry aside from an experiment to produce electric cars, and economists have suggested that that has made it easier to limit automobile use in Norway because there is no domestic industry to lobby against such decisions as in neighboring Sweden, home of Saab and Volvo.

Norway designed the duties to make large-engine sport utility vehicles much costlier than compact cars. For instance, a high-end Toyota Land Cruiser that costs $60,000 in the United States might run as much as $100,000 in Norway.

Economists argue that gasoline prices and other auto taxes in Norway are not so expensive when measured against the annual incomes of Norwegians, among the world's highest at about $51,700 a person, or the shorter workweek of about 37.5 hours that is the norm here. (Norwegians also get five weeks of vacation a year.) The government frequently makes such arguments when responding to criticism over high fuel prices.

"We do not want such a system," Per-Kristian Foss, the finance minister, said in a curt response to the calls for lower gasoline taxes this month in Parliament.

Other European countries have also placed high taxes on gasoline, and some like Britain and the Netherlands have gasoline prices that rival or at times surpass Norway's. In Oslo, as in other European capitals, there is ample public transportation, including an express airport train that whisks travelers to the international airport from downtown in 20 minutes. Yet Norway, with a population of just 4.6 million, differs from much of Europe in its breadth, with an extensive network of roads, tunnels and bridges spread over an area slightly larger than New Mexico.

"Rural areas without good public transportation alternatives are hit a little harder," said Knut Sandberg Eriksen, a senior research economist at the Institute of Transport Economics here who estimates the government collects about $2.4 billion in fuel taxes alone each year, or about $519 for every Norwegian. Some of the revenue supports Norway's social benefits.

"Our government has been grateful to use the automobile as a supreme tax object," Mr. Eriksen said. "The car is its milking cow."

Perhaps as a result of such policies, Norway has lower levels of car ownership than other European countries, with 427 cars per 1,000 people in 2003 compared with more than 500 cars per 1,000 people in both France and Germany, according to the Economist Intelligence Unit. The United States has more than 700 cars per 1,000 people.

The average age of a passenger car in Norway is 18 years when it is scrapped, though this might be changing in a strong economy with the lowest interest rates in 50 years. Registrations of new passenger cars last year climbed 29 percent from 2003. But the frugality of some Norwegians, even in rural areas, suggests older cars will remain at many households.

"Personally I have no need for a new vehicle; I'm proud to hold on to my own for as long as I can," said Johannes Rode, 69, a retired art and music teacher and owner of a 29-year-old red Volkswagen Beetle in Ramberg, a coastal town in northern Norway. "To do otherwise would be wasteful and play into the oil industry's hands."

Caution about oil's risks is common in Norway. The government created the Petroleum Fund more than a decade ago as a repository for most of the royalties it receives from oil production. The $165 billion fund, overseen by the central bank, is intended for the day when oil resources in the North Sea start to dry up.

Meanwhile, unlike other large oil producers like Saudi Arabia, Iran or Venezuela, Norway has done little to encourage domestic petroleum consumption. In part because high gasoline prices deter such a luxury, Norway consumes little more than 200,000 barrels a day of oil while exporting nearly its entire production of 3.3 million barrels a day. This confounds some Norwegians.

"Norway is a rich, oil-producing country with no foreign debt," said Egil Otter, a spokesman for the Norwegian Automobile Association, a sister organization to AAA. "We think that Norway, with its enormous and complicated geography and distances, deserves pump prices at an average European level. Motorists find it very difficult to be taxed into these extremes."

Such opinions contrast with the quick defense of high gasoline prices often voiced around Norway, which is celebrating its 100th year of independence from neighboring Sweden and so far has opted out of joining the European Union.

Sverre Lodgaard, director of the Norwegian Institute of International Affairs, said Norway had a responsibility to manage its oil resources soberly because of its support of worldwide limitations on greenhouse-gas emissions.

"We are engaged on this front," Mr. Lodgaard said. "It is difficult for us to view the example of the United States, which is overconsuming to an incredible extent."

The United States, which uses about a quarter of the world's daily oil consumption, had the cheapest gasoline prices of the 27 industrial countries measured by the International Energy Agency in its most recent analysis of fuel prices. Taxes accounted on average for just 20 percent of the price of gasoline in the United States, the agency said.

Even amid Norway's bluster on gasoline prices, however, environmentalists suggest the nation could do more to achieve greater energy efficiency. One sore point is the consumption of electricity, traditionally generated by hydropower but soon to depend more on a fossil fuel, natural gas.

Producing oil for export in Norway requires large amounts of electricity, and homes in the country, with much of its territory above the Arctic Circle, use electricity for heating, creating much higher electricity consumption levels than elsewhere in Europe. It is not uncommon to drive on well-lighted roads even in remote areas.

"There are areas in which we have done O.K.," said Dag Nagoda, a coordinator in the Oslo office of the WWF, formerly known as the World Wildlife Fund. "And there are areas in which we can do better."


TOPICS: Business/Economy
KEYWORDS: energy; energyprices; gas; gasprices; norway
Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-69 next last
To: Turbopilot

They became wealthy liberals...


41 posted on 04/30/2005 9:00:32 AM PDT by pjsbro
[ Post Reply | Private Reply | To 39 | View Replies]

To: BobL
I'm just making the point that the Republicans and many of the FReepers are accomplishing what the Sierra Club and the Dems could only dream of - that being to stop people from driving.

Where are your facts and figures to back this up? What makes you make this claim? Tell us why you think we, and the republican politicians,are making it impossible to drive in this country? Why do dems like yourself try these tatics on FR? Who do you think will believe you? Ok, answer these questions and I will have some more.

42 posted on 04/30/2005 9:03:28 AM PDT by calex59
[ Post Reply | Private Reply | To 29 | View Replies]

To: BobL

Marvelous! A Texan who understands the socialist mentality of the state's politicians!!! I love it!


43 posted on 04/30/2005 9:06:06 AM PDT by whipitgood (Public schools have replaced a biblical moral code with pragmatism. Civilization, beware!)
[ Post Reply | Private Reply | To 3 | View Replies]

To: pjsbro
Something is rotten in Singapore.
Don't they have enviro-whackos there?
 
44 posted on 04/30/2005 9:08:47 AM PDT by oh8eleven
[ Post Reply | Private Reply | To 1 | View Replies]

To: pjsbro; Carry_Okie; hellinahandcart; farmfriend; B4Ranch; ancient_geezer; editor-surveyor

You vill pay the $6.66/gallon and you vill like it!


45 posted on 04/30/2005 9:11:53 AM PDT by hellinahandcart
[ Post Reply | Private Reply | To 1 | View Replies]

To: oh8eleven

Not yet...they're still in the early stages of enjoying the fruits of capitalism...too early to start feeling guilty.


46 posted on 04/30/2005 9:11:58 AM PDT by pjsbro
[ Post Reply | Private Reply | To 44 | View Replies]

To: sgtbono2002
for the common good? Sounds like she is Norwegian Karl Marx.
47 posted on 04/30/2005 9:13:41 AM PDT by ol' hoghead (islam, the cult of Mohammad)
[ Post Reply | Private Reply | To 33 | View Replies]

To: pjsbro
$6.66 a galon... that's IT !
48 posted on 04/30/2005 9:15:38 AM PDT by traumer
[ Post Reply | Private Reply | To 1 | View Replies]

To: pjsbro
At a pub in Oslo, for instance, a pint of beer might cost the equivalent of $12 and an individual frozen pizza $16.

$12 for a beer? Time to add Norway to the list of places I will never go.

49 posted on 04/30/2005 9:35:42 AM PDT by kennedy ("Why would I listen to losers?")
[ Post Reply | Private Reply | To 1 | View Replies]

To: RayChuang88

Is that a bird dropping? Don't stop too quick in front of my 1 ton Dodge pickup. Splat!


50 posted on 04/30/2005 9:36:39 AM PDT by B4Ranch (Report every illegal alien that you meet. Call 866-347-2423)
[ Post Reply | Private Reply | To 8 | View Replies]

To: pjsbro
What would be more interesting would be to combine these figures with an average number of miles driven per day. The United States is a very spread out country. Many older countries, established during the domination of horse travel, have cities that are relatively small and confined compared to America's urban sprawl.

I believe the size of a city would be restricted by the travel time from any point to another. My ball park would be 15-25 minutes across. On horseback, with an average speed of 20MPH tops, that would be roughly 5 to 8 miles across. The rule of thumb still holds for many American cities that saw growth after the 1900s; average of 35MPH, it would be 9 to 15 miles across.

51 posted on 04/30/2005 9:45:36 AM PDT by sten
[ Post Reply | Private Reply | To 1 | View Replies]

To: hellinahandcart

>>you vill like it!<<

Wrong attitude for assertive Americans. We've had one small trial tea party this year.... the Minutemen, a great success. We're going to have a few more .... States saying no to "No Child Left Behind" and canceling the benefits for illegals.

We decide what we will like, not the tax bureaus.


52 posted on 04/30/2005 9:46:10 AM PDT by B4Ranch (Report every illegal alien that you meet. Call 866-347-2423)
[ Post Reply | Private Reply | To 45 | View Replies]

To: sgtbono2002
Sounds like she is Norwegian.

Nej, nej!

53 posted on 04/30/2005 9:48:21 AM PDT by Grut
[ Post Reply | Private Reply | To 33 | View Replies]

To: CurlyDave

There's no such thing as real money when push comes to shove.


54 posted on 04/30/2005 9:55:48 AM PDT by Old Professer (As darkness is the absence of light, evil is the absence of good; innocence is blind.)
[ Post Reply | Private Reply | To 36 | View Replies]

To: pjsbro
Hmm.

So Norway is not dependent on those filthy Arab oil producers for its energy needs, a goal that some folks in high office in the US suggest we should aspire to?

But, in spite of that, they have super-high gas prices, even if you don't figure in the gas tax that, according to the article, accounts for 67% of the price.

Note the article did not say gas taxes were 67 percent.

It said they were 67 percent of the price.

That would mean a before-tax price of $3.99 if you don't count Norway's VAT, which is about 24% I believe. If the VAT is applied first, the price would be on the order of $3.22 per gallon, about twice the before-tax price we're currently paying in the US.

Something is inconsistent about this.

If the NYT reporter did dome digging, I would hope he might find another story lurking beneath the one he wrote.

55 posted on 04/30/2005 10:39:38 AM PDT by logician2u
[ Post Reply | Private Reply | To 1 | View Replies]

To: lizma

Hey!!

Don't make fun of my party :-P

Cheers.


56 posted on 04/30/2005 11:03:46 AM PDT by Eurotwit (WI)
[ Post Reply | Private Reply | To 9 | View Replies]

To: calex59
The name calling again.

The fact is when you punish people for driving by charging them 20 to 75 cents per mile in tolls, versus 2 to 3 cents per mile for the gas tax, you do change their behavior.

A combined state and federal gas tax of no greater than 4 cents per mile (or 80 cents per gallon, if your car gets 20 miles per gallon) could fund every needed freeway in this country.

You may consider charging people obscene amounts of money to do something most people feel is a necessity (i.e., driving a car) as something fitting of Republicans, but I consider it something right out of the Democrat and Sierra Club playbook - and if this was Clinton's idea, I'd oppose it just as much.

I can't help it if the Republicans are the ones leading this new form of government money grabbing.
57 posted on 04/30/2005 1:27:26 PM PDT by BobL
[ Post Reply | Private Reply | To 42 | View Replies]

To: whipitgood
"Marvelous! A Texan who understands the socialist mentality of the state's politicians!!! I love it!"

I've lost the battle here. We're getting 4000 miles of these privately funded and operated toll roads. The same company building our first toll road charges 20 cents (US) per mile in Canada for a similar road. Our combined state and local gas tax here in Texas is 2 cents per mile (if your car gets 20 MPG). The company got monopolistic-type protections in Canada against the province of Ontario even widening government owned highways (if they would draw traffic from the toll road).

Just yesterday the Republicans started talking about embedding RFIDs in the registration sticker of EVERY single car in Texas - so as to tell who's uninsured (yep). Meanwhile Republican Governor Perry is sending representatives to a conference to figure out how to use GPS to toll everyone, for every mile they drive.

People may call this garbage the free market or Republicanism, but it ain't the Republican Party that I grew up with.
58 posted on 04/30/2005 1:38:56 PM PDT by BobL
[ Post Reply | Private Reply | To 43 | View Replies]

To: rightwinggoth
"Who buys frozen pizza at a pub?"

I don't know, but chances are that anything you might buy in Norge is frozen! :o)

59 posted on 04/30/2005 1:41:39 PM PDT by editor-surveyor (The Lord has given us President Bush; let's now turn this nation back to him)
[ Post Reply | Private Reply | To 10 | View Replies]

To: jimbergin
"do you have a source for your claim that a gas tax paid for road only costs 1/10th the cost of a toll road?? I find that hard to believe."

It is tough to believe, but the gas tax is 2 cents per mile here in Texas (if you get 20 MPG, lower if you get more). Tolls on our 4000 miles of private toll roads will be on the order of 20 cents per mile, as they are in Canada (same company, some monopoly for them). While it's true that we can't build much for 2 cents per mile (40 cents per gallon), we can build a heck of a lot for 3 cents per mile.

I just have a problem with summarily jettisoning the freeway system in this country, for toll roads, when the only reason for doing so is a bunch of Republicans that treat government highway spending no different than government welfare spending.
60 posted on 04/30/2005 1:43:44 PM PDT by BobL
[ Post Reply | Private Reply | To 37 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-69 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson