Crude oil prices dictate more than half the price of gasoline, and the price of crude, in turn, fluctuates with broad global economic trends. So today’s cheap gas probably reflects the depression of demand for oil due to the weak U.S. and European economies. But a significant factor keeping gas cheap is the erosion of gas taxes. The federal tax of 18.4 cents per gallon has not gone up since 1993 — meanwhile losing a third of its value in real terms. State taxes are about 30 cents per gallon on average, but they, too, have barely risen lately. In real terms, Americans spend just $19 on gas taxes per 1,000 miles driven — half of what they paid in 1975, according to a recent report in USA Today.
