Joseph Trevisani

The Dollar Holiday Blues

In July 2007 the average price of retail premium gas in six European countries (Belgium, France, Germany, Italy, Netherlands, UK) was $7.14 per gallon. At the end of June this year it was $9.06, a 26.9% increase. In the US the price rose from $3.17 to $4.31, a 36% increase. The difference being the decline in the dollar against the euro. Americans are paying more for their fuel relative to the Europeans than a year ago, but that does not mean the European are not paying more as well. Higher fuel prices have the same damaging effect in Europe that they have here. It is the differential price that matters to consumers and economic growth not the absolute level.