Governments addicted to gasoline

In 2008, taxes in Canada represented on average 35% of the pump price. Taxes include a Federal Excise Tax of 10.0¢ for Regular, 4.0¢ for Diesel and Provincial Tax. According to 2005 statistics the Government of Canada raised about $5 billion per year from excise taxes on fuel, consisting of $4 billion from the gasoline excise tax and $1 billion from the excise tax on diesel and aviation fuel. While the GST is not reported on a commodity-by-commodity basis, GST revenues from gasoline and diesel fuel are estimated to be about $2 billion per year. Collectively, the provinces and territories raise about $7.8 billion per year from excise taxes on gasoline and diesel fuel. To summarize this, about one third of the price of a liter of gasoline at the pump is tax. A sixty dollar fill up translates into twenty dollars in the government coffers.

In the US, for the first quarter of 2008, the average state gasoline tax was 28.6 cents per gallon, plus 18.4 cents per gallon federal tax making the total 47 cents per gallon. For diesel, the average state tax is 29.2 cents per gallon plus an additional 24.4 cents per gallon federal tax making the total 53.6 cents per gallon. That is around 15%. We also realize now that the current American government is heavily influenced by the oil industry.

North American governments don’t seem to be doing enough to promote and encourage developing hybrid electric vehicles (HEVs), plug-in hybrids and fuel cell vehicles (FCVs). Currently, there is not much of a choice as the type of vehicles available to us in the North American market. The majority, whether fuel efficient or not, are powered by gasoline. Without gasoline, billions of dollars would be lost in tax revenue.