The difference between Gasoline and Petrol

One of the word changes that I keep tripping up on is the Gasoline/Petrol words. They both mean exactly the same thing, but one is American and the other is British - I'll leave it up to you to figure out who uses which word. The only significant difference is the price! Gasoline costs a great deal less than Petrol. By this, I mean that fuel costs here in the United Kingdom are significantly higher than in America.

Back in October when I was home in Georgia visiting my family and friends, gas prices were artificially inflated up to as much as $5 a gallon or more due to the two hurricanes hitting the Texas coasts this year, almost back to back. Now I understand it's down close to $2 a gallon again. That's about what it was when I moved over here to England 2 years ago. At that same time, the price of petrol was about 87 pence or so a Liter. Yes, they sell fuel over here in liters, or to be more proper, litres instead of gallons. At that time, the currency exchange was hovering around $2 per Pound Stirling. So by factoring in 3.78 liters per gallon multiplied by the price per liter gives us a price of 3.29 Pounds per gallon. Then you multiply this by the currency exchange rate at the time of $2 for £1, that gives us a dollar value for $6.58 a gallon for gas here in England. Oh, and by the way, I learned that I had to be careful about which gallon I use in these calculations. We Americans use the English gallon while the British use the Imperial gallon, which is a wee bit more. Why they don't use their own gallon as we do is a mystery to me.

But the price of oil went up to record highs during this last year and the price of petrol ran up to about a £1.17 a liter. Now plugging this into the above calculations, we find that gas prices here in American dollars was as high as $8.85 per gallon. The prices were even higher before I left to come to America in September. Then, in this last month, the price of oil has dropped a lot and because of the world wide economic crisis, the Pound Sterling has dropped against the US Dollar. As I write this, £1 will fetch you only $1.47.

As I was riding on the bus yesterday (because we sold our car because it was too expensive to keep), I noticed that the price at a local station was now down to £0.92 per liter. Now let's plug in these new figures into the formula I describe above. We get a gallon of gas for about £3.48. Enter in the new exchange rates and we get $5.11 a gallon. This is still more than double the price of gas back home in Georgia. But it's not as bad as it was just a few months ago. Now consider then that the price of oil per barrel is the same for the British as it is for the Americans, maybe even a little less because of the large oil deposits in the North Sea that mostly comes through British companies. The large difference for what we pay for gasoline/petrol here in England compared to what you are paying for it now is due largely to taxes! So next time you start to grumble about the price of gas, consider this: it could be much worse!

The same goes for taxes. Taxes here in the United Kingdom are much higher across the board than they are back in the good old USA. They have a national sales tax, called Value Added Tax or VAT for short, of 17 percent! Ouch! And Income Taxes can be rather painful too, especially if you are rich. The highest tax bracket as I understand it, is about 77 percent! Can you imagine having to pay 77 percent of your income in for taxes? What's the point of becoming rich if most of it goes to the State? And to think that I used to grumble when the company I used to work for back in the States would take out the maximum taxes out of my annual bonus at the rate of 28%. But the nice thing over here is that the Crown doesn't tax people for income earned abroad. The IRS will tax you for everything you earn, no matter what country you earn it in. British citizens living abroad don't have to pay taxes to the Crown for any earnings they get from abroad. So far as I know, the United States is the only country that charges income tax on citizens that live abroad. However, they have given us expatriates a wee bit of wiggle room. We don't have to pay on any income as long as we earn less than $76,000 a year. Once you hit that mark, you gotta pay taxes on all of it. Not that I have to worry about such things as that because I'll never earn that much in a year even if I live in the States. :-) I still have to file; I just don't have to pay . . . yet.