Why gas prices are so different from country to country

Gas prices differ between countries because the oil underneath them is a global commodity but everything layered on top is national. Taxes, subsidies, exchange rates and the cost of moving fuel to the pump turn roughly the same barrel of crude into prices that run from $0.023 a litre in Libya to $4.41 in Hong Kong in our latest snapshot of 170 countries (GlobalPetrolPrices, retrieved 2026-10-13). Even ignoring the extremes, the country at the 90th percentile pays 2.8 times what the country at the 10th percentile pays. Tax is the single biggest reason prices are high; subsidy is the biggest reason they are low.

The spread, from bottom to top

Lining up all 170 countries shows how uneven the distribution is. Most of the world clusters in a band around the median of $1.55; the long tails are where policy is most extreme.

1. Taxes: why the expensive end is expensive

Most countries tax petrol twice: a fixed excise duty on every litre, and a sales tax or VAT on the final price, including the duty. Fuel taxes are easy to collect, hard to avoid and can be justified as a charge for road use and pollution, so many governments lean on them heavily. In much of Europe, tax makes up more than half of what a driver pays at the pump.

The United States shows the opposite choice. Its federal gas tax has been 18.4 cents a gallon since 1993, with state taxes on top that are modest by international standards. The result: a litre costs $1.23 in the US against an average of $2.44 across Germany, France, Italy, the UK and the Netherlands. Those economies buy crude on the same world market; the 98% difference is overwhelmingly tax.

2. Subsidies: why the cheap end is cheap

At the other extreme, 8 countries sell petrol for less than 50 cents a litre. Nearly all are oil or gas producers whose governments fix the domestic price below what the fuel would earn abroad. The cost is real but hidden: it shows up as lost export revenue or as losses at a state oil company rather than as a line on a receipt. We profile these countries in the cheapest gas in the world, and the Gulf states, which sit between full subsidy and market pricing, in petrol prices in the Gulf.

3. Currency: the same price, a different dollar figure

Pump prices are set in local money but compared in dollars, so exchange rates move the ranking even when nothing changes at the forecourt. A weaker currency also raises the local cost of imported crude and refined fuel, which eventually feeds through to the pump. The clearest case in our data: between 2026-07-03 and 2026-10-13, petrol in South Korea moved −20.1% in KRW but −7.5% in US dollars, because the KRW strengthened 13.6% against the dollar over the same period (local change estimated with open.er-api.com exchange rates from both dates).

4. Geography, refining and competition

The last layer is the physical cost of getting fuel to a pump. Countries without refineries import finished petrol, landlocked countries truck it in from distant ports, and islands ship it in small loads; each step adds cost. Land prices matter too, which is one reason dense cities such as Hong Kong and Singapore are expensive. Competition plays a part: a market served by a few fuel companies tends to have higher margins than one with many independent stations.

The neatest way to see all four forces at once is to compare neighbours. Two countries next to each other share geography and buy oil at similar prices, so a big gap at the border is almost pure policy. These are the widest gaps between neighbours in our data:

Gaps like these are why fuel smuggling thrives along certain borders, and why governments with cheap fuel often ration it or restrict sales near frontiers. At the other end of our list, Argentina and Chile are only 7% apart, a sign of similar tax and pricing choices on both sides.

Putting it together

A useful rule of thumb: start from the world oil price, which is the same for everyone, then ask three questions. Does the government tax fuel or subsidise it? What has the currency done against the dollar? And how far does the fuel have to travel to reach the pump? Those answers explain almost every surprise in the ranking. Europe is expensive because of tax, the Gulf and North Africa are cheap because of subsidy, and import-dependent, remote or landlocked places pay a logistics premium on top of whatever their tax policy is.

See how the extremes look in practice in the most expensive gas in the world, follow recent movements in global gas prices in 2026, or look up any country on the petrol price tracker. Our methodology page explains how we collect and convert prices.