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4/13/08

EU-Digest: The Netherlands: Consumer rip-off at gas stations in the EU - by Rick Morren

An EU-Digest editorial report on gas and oil pricing scams in the EU

The Netherlands: Consumer rip-off at gas stations in the EU - by Rick Morren

Its amazing what is happening at gas stations all over the EU. The consumer is either being ripped-off or someone is not able to calculate.

Eight years ago in 2000, Europeans paid euro 1.20 to purchase US $ 1.00. At that time one barrel of oil on the world market cost US $ 60.00. Based on the exchange rate then, it meant that Europeans were paying euro 72.00 for one barrel of oil, and Diesel oil at the pump was being sold at .82 cents per liter.

Today, April 2008, Europeans buying a US dollar pay only euro 0.65 for that dollar and a barrel of oil costs $ 110.00. In today's euro's this equates to euro 70.10 per barrel of oil. Putting these figures together we see that a barrel of oil based on today's dollar exchange rate actually costs euro 1.90 euro less than what the EU had to pay for that same barrel of oil back in the year 2000. Unfortunately at local gas stations EU citizens are not seeing any reflection of the lower oil price as a direct benefit from their strong euro. While the purchase price of a barrel of oil has actually gone down over the past 8 years, when purchased in euro's, consumers are now paying euro 1.25 for that same liter of diesel fuel for which they used to pay euro 0.65 in 2000. A nearly 100% increase.

It is pretty clear someone needs to brush-up on their mathematical skills. Either the oil company executives and government officials are having badly functioning calculators, or someone is ripping off the consumers. The latter probably being the case. It is high time for Mrs. Neelie Kroes, European Commissioner for Competition to take a look into this.

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