The “OPEC gas tax” — it dwarfs the rest

The Organization of Petroleum Exporting Countries (OPEC) cartel — and the world’s failure to curb demand in the face of it — produce a “tax” on gasoline that is far greater than U.S. gas taxes.

Oil price forecasts from 2002 — before oil prices began increasing sharply (see graph below) — provide an estimate of the size of the OPEC gas tax. The 2002 forecast by the U.S. Department of Energy predicted oil prices of $28 per barrel in 2008 (accounting for inflation).  Perhaps that would be $35 per barrel, now, in 2011.

With oil selling for about $100 per barrel that’s a $65 per barrel OPEC tax on oil, and that translates to, very roughly, a $2.00/gallon OPEC tax on gasoline.

How does this compare with Federal and State gas taxes?

The Federal gas tax is 18.4¢/gallon.  State gas taxes — including sales taxes on gasoline — averaged 27.4¢/gallon as of March 2007 (American Petroleum Institute). Thus, combined Federal and State gas taxes are about 46¢/gallon.

And remember, that state and federal taxes go for building and repairing our roads. What does the OPEC tax go for?

We could fight the OPEC tax

But, it would require an alliance between those who don’t like paying OPEC and those more interested in guarding against climate change.