You think you've got it bad...Overseas gas prices are through the roof!

As gas prices in the U.S. continue their steady march upward, the news is filled with stories about the way that it's changing our lives. As we hear every night, people are finding cheaper ways of getting to work, cutting down on trips to the grocery store, buying locking gas caps, and even refitting their cars to run on vegetable oil. Viewing all this rapid change, it's hard to imagine how people would respond if the price of gas rose to, say, $8.70 per gallon. However, that is the average price for gas in the European Union.

In the United Kingdom, diesel fuel now costs $11.50 per gallon, while it costs $8.54 a gallon in France. Regular gasoline is just as bad: in France, it's going for $8.67 per gallon, which is just below the Union-wide average. Part of the reason for this high cost is the increasing price of gasoline; because gas is traded in dollars, it has inflated worldwide. In fact, were it not for the euro's considerable strength against the dollar, gas prices would be much, much higher.

Another part of the reason for the huge gas prices is the EU's heavy tax on gas. While taxes only account for about 11% of gas prices in the United States, they make up approximately 70% of gas prices in the European Union. France's Nicolas Sarkozy has proposed a reduction/removal of Europe's value added tax, or VAT, which would cut gas prices by approximately 20%. Unfortunately, because of the structure of the EU, doing so will require the unanimous approval of all member states. Moreover, there is every likelihood that this tax reduction would only encourage gas suppliers to raise their prices still further.