--------- Forwarded message ----------
From: Mark Graffis <[EMAIL PROTECTED]>
Date: Fri, 20 Nov 1998 12:52:37 -0600 (CST)
Subject: REAL COST OF U.S. GASOLINE IS $15.14 PER GALLON, REPORT SAYS
By Tom Doggett
WASHINGTON - So you think you're getting a good deal on a tank of
gasoline these days? Not so, if all the oil industry tax subsidies
received from the federal and state governments and other costs that
went into producing that gallon of gasoline were included in the pump
price.
Such external costs push the price of gasoline as high as $15.14 a
gallon, according to a new report released Tuesday by the
International Centre for Technology Assessment.
"In reality, the external costs of using our cars are much more higher
than we may realise," the Washington-based research group said in its
report.
The report examined more than 40 separate cost factors the group said
it associated with gasoline production but aren't reflected by the
price of gasoline at the pump.
These external costs total up to $1.69 trillion per year, according to
the report.
The group points out that the federal government provides the oil
industry with tax breaks to help U.S. companies compete with
international producers, so gasoline remains cheap for American
consumers.
The Department of Energy is forecasting that the national price for
regular unleaded gasoline will average $1.02 during the current
quarter, the lowest price on record for any three-month period when
adjusted for inflation.
Tax subsidies don't end at the federal level, as the group said most
state income taxes are based on oil firms' lower federal tax bills,
which result in companies paying $123 million to $323 million less in
state taxes.
In addition to tax breaks, the federal government provides up to
$114.6 billion in subsidies annually that support the extraction,
production and use of petroleum, such as research and development and
export financing.
The federal government also spends up to $1.6 billion yearly on
regulatory oversight, pollution cleanup and liability costs connected
to the oil industry, the group said.
In addition, U.S. Defence Department spending allocated to safeguard
the world's petroleum resources totals $55 billion to $96 billion a
year, according to the group.
(C) Reuters Limited 1998.
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