Fun with Math

Now it's time for (drum-roll) FUN WITH MATH!

UK motorists are 'pleased' to find petrol (gas) below £1 per liter. Wow! They're almost getting excited!

So let's compare the UK cost to the US cost. Everyone get out your pencil and paper to verify my calculations. Class, are we ready? Here we go!

The current US/UK exchange rate is $1.46 per £1.00 sterling, so £1.00 per liter equals $1.46 per liter, right?

But in the US, the cost of gas is measured in gallons, so we need to convert. There are appx 3.7 liters per gallon. So the equivalent cost per gallon in US dollars is $1.46 x 3.7 = $5.40. Tell me if I'm wrong.

Let's say you tank up at Costco in Texas. The price there is currently  $1.87 per gallon. This is an unfair comparison, because a price is always cheapest where they grow the stuff. But still, Texas is a price driver.

Now class, let's convert the Texas cost of a gallon into the UK cost per liter.

Stay with me.

If the US cost is $1.87 for 3.7 liters, then the UK cost for a liter, in dollars, would be $1.87/3.7=$0.50, or fifty US cents per liter. Right or wrong?

Now to get the equivalent cost in £Sterling we divide the dollar cost by the exchange rate, or $0.50/1.46=£0.34. That's thirty-four UK pence per liter, ok?

To summarize, the UK pays £1.00 per liter, while the US pays £0.34 per liter. The UK pays $5.40 per gallon, while the US pays $1.87 per gallon.

But before members of our class object to this comparison, I wish to offer one bit of anecdotal evidence:

Several years ago the Saudi oil minister stated that the UK earns more in petrol tax revenue than his country earns in production revenue.

If my calculations are wrong, I want to be the first to know. Class adjourned.