A Chinese Perspective on World Gas Prices

18 May 2012

The following data was taken from the March 27, 2012 issue of 星尚画报 (“Channel Young”) and reproduced with English translation:

Country Gas Price (USD/liter) GDP per capita (USD) Avg. Income (USD) 100 L / GDP per capita 100 L / Avg. Income
China 1.4 4428 2356 2.94% 5.52%
USA 0.96 47199 38686 0.20% 0.25%
Japan 1.42 42831 39304 0.33% 0.36%
Turkey 2.57 10094 5242 2.55% 0.49%
Norway 2.444 84538 37994 0.29% 0.64%
Denmark 2.34 46915 28583 0.50% 0.82%
UK 2.145 36144 27809 0.59% 0.77%
France 2.132 40152 23229 0.53% 0.92%
Germany 2.132 39460 24321 0.54% 0.88%
Italy 2.353 33917 18783 0.69% 1.25%

Here’s the chart in its original Chinese:

汽油价格美元 人均GDP(美元 人均总收入美元 百升汽油人均GDP 百升汽油人均总收入
中国 1.4 4428 2356 2.94% 5.52%
美国 0.96 47199 38686 0.20% 0.25%
日本 1.42 42831 39304 0.33% 0.36%
土耳其 2.57 10094 5242 2.55% 0.49%
挪威 2.444 84538 37994 0.29% 0.64%
丹麦 2.34 46915 28583 0.50% 0.82%
英国 2.145 36144 27809 0.59% 0.77%
法国 2.132 40152 23229 0.53% 0.92%
德国 2.132 39460 24321 0.54% 0.88%
意大利 2.353 33917 18783 0.69% 1.25%

As you may have guessed, this article came out at a time when gas prices suddenly went up and caused quite a stir.

Of course, stats like GDP per capita and average income feel a lot more relevant to gas prices for countries where most of the population drives. It would be interesting to see this chart using “average income of drivers” instead of overall average income. You’d see a huge jump in the income column for China, but not as much of one for the USA.

(Oh, and yes, I’ve been meaning to post this for close to two months now…)

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John Pasden

John is a Shanghai-based linguist and entrepreneur, founder of AllSet Learning.

Comments

  1. Another conclusion to draw from this table combined with income inequality in China is that the Chinese poor are disproportionately burdened by gas prices, and the continued favoring of the Eastern seaboard by the central government. Sad and maddening.

  2. The British data is wrong. Average income in the UK is around £25000, which at current exchange rates (which are around historical averages) of £1:$1.5, is $37,500. Given they have this basic fact wrong and to the order of degree they have it wrong, I am wondering what else is incorrect. Probably most of it, I should imagine.

    The data also doesn’t take into account taxation levels (average net salary would be more revealing) or tolls (i.e. no/few tolls on UK roads other than in London, lots of tolls in Japan).

  3. James H Says: May 18, 2012 at 10:01 am

    Related story http://www.bloomberg.com/slideshow/2012-05-12/highest-cheapest-gas-prices-by-country.html#slide55

    Need to figure out how to arbitrage the Venezuela–Norway price discrepancy.

    I think you bring up a good point John in terms of income of Chinese car driver vs. income of average Chinese. Another point about China vs. US is the vast number of substitutes the Chinese have at their disposal–rogue tricycles, ebikes, buses, metro–that make their consumption of gas a smaller percentage of their disposable income.

    Ultimately, I think anyone in a big city in China (read: me, who will not be purchasing a car here) would agree that the more deterrents for private car ownership the better. It’s simply far too crowded and dangerous as is…

  4. Perhaps Chinese consumers should stop trying to live a Western lifestyle on Chinese salaries? Its always been odd to see people earning 4000RMB per month driving BMW 3-Series etc, how did they afford the insurance and maintenance?

    • I’ll bite. In my experiance, Such people likely have other less reputable sources of income or sizeable family support. Whether they admit to that or not is another thing.

  5. Really interesting, thanks John. Here is some info I took from Wikipedia that may be interesting in this context:

    List of countries by the number of motor vehicles per 1000 people (Rank)

    China: 47 (113)
    USA: 808 (2)
    Japan: 589 (17)
    Turkey: 142 (81)
    Norway: 578 (18)
    Denmark: 549 (25)
    UK: 525 (30)
    France: 575 (19)
    Germany: 534 (28)
    Italy: 690 (10)

    A chart like this and the one in the original post for all the Chinese provinces would be interesting.

    China is suffering from pollution and traffic problems (at least in the big cities, which also have the highest concentration of people who can afford cars). Do higher gas prices keep even more people from buying cars? Does the government perhaps keep gas prices high for this reason?

    Since China is the world’s fastest growing automobile market, I wonder what this chart would look like in, say, 50 years or so.

    Little sidenote: The “100 L / Avg. Income” value for Turkey has not been calculated correctly… Probably a typo.

    • I didn’t check the calculations, but I did make sure (and just checked again) that I copied the numbers exactly as they were in the original article.

  6. Thanks for the post John. I think that the table as presented is more valuable as it stands than adjusting it on a “per driver” basis, simply because petrol is used in every area of the economy.
    As most readers will know, the production cost of petrol is fairly similar all round the world – the difference is tax. Governments tax petrol for two main reasons – revenue raising and to account for the bad environmental impacts that are not otherwise priced into what you buy.
    Both these reasons resonate in China – it is low cost to tax petrol, and the environmental issues are evident. It is not primarily (or even mainly) about private cars, traffic and exhaust pollution; petrol used in private cars is a small part of the story, particularly in China.
    As with most pricing in China, even by the Government, the policy on petrol looks pretty efficient to me.
    Re: the point made above about ‘why don’t the Chinese stop trying to live a Western lifestyle’, they don’t. (1) The car ownership rate in the US is still roughly 10 times what it is in China; (2) Chinese cities are built at significantly higher density; (3) China is much more relaxed on juxtaposition of land uses, so people don’t need to travel so much for daily and weekly needs.

  7. This is actually a very good thing for China, and China’s poor. The artificially low costs of driving in the US over the past 6 decades are a major reason our country is strapped with the problems of near-universal car ownership, and insufficient public transportation. In China, driving is still a luxury, (not a necessity, like it is in many parts of the US) which means poor people don’t NEED cars. If you visit many poor neighborhoods in the United States, you will see many of our poor are forced to purchase, maintain, gas up, and insure their own private transportation, at a tremendous financial expense, when compared to the costs of efficient public transit. When you do all the calculations (including necessary infrastructure, which is primarily road maintenance) it isn’t that gas is excessively expensive in Asia and Europe. Most developed countries have models where the costs associated with automobiles are passed on to the driver in the form of gasoline taxes. Rather, the costs of gasoline in the US excessively LOW, as the government has provided enormous subsidies to drivers ever since the end of World War 2. These subsidies come at the expense of neglect for public transportion systems, which in fact receive far less public funding than they would if transportation dollars weren’t depleted by subsidizing private automobile ownership.

  8. John,

    The more I read your posts the more I think you should have been an Economist and not a Linguist. =)

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