American gas prices have never been so high and I, along with many other Americans, are stuck driving in a SUV with a twenty-some gallon tank that only takes premium gasoline.

Yesterday, I spent $4.29 per gallon.  Let’s do the math: $4.29 a gallon multiplied by a twenty-three gallon tank equals $98.67 per tank of gas.  I drive around 275 miles a week for work so I have to refuel weekly: multiply $98.67 by four and I get a sum too large to fathom. Sadly, I am more of an average case rather than a special exception.  Americans make up less than five percent of the world’s population but own over one third of the automobiles. Thus, I have decided to move to Caracas, Venezuela-the world’s fifth largest oil exporter-where gas is a mere $0.12 a gallon.

Why So Low, Venezuela?

Think about paying only $.13 per gallon of gas!  Unthinkable to Americans but a reality to the very few Venezuelans who own cars (around 53% of Venezuelans are poverty-stricken).  But this cheap gas comes with a different kind of price.  Latin American countries have been privatizing their petroleum industry since the early 1900’s–this is why the prices are so low.  Through privatization, these countries hoped to attract much-needed investment capital, increase GDP and introduce free market economic reforms but much of the reforms have failed to live up to their promises.   Many other Latin American countries that have a natural abundance of oil as well, including Ecuador and Bolivia.  Together, these countries are affectionately referred to as “Petrocracies:” oil-rich countries inhabited by poor citizens.

Note Spain’s high gasoline price.  Although the price of raw gas is about the same for both the U.S. and European countries, the tax on gasoline is much higher in Europe (France leads with a 70% gas tax).  Also, note the difference in gas price between Venezuela and another listed Latin American country.  Oil barren Uruguay’s gas price is 5,050% greater than Venezuela’s gas price.  Even Puerto Rico’s low $1.74 per gallon price is still 1,450% greater than Venezuela’s paltry $0.12!