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Energy consumption in the world has been in increase over the years, this has mostly been due to the ever increasing world population and the need to meet the energy needs of industries that are ever expanding their capacity (Lin, 25). Energy sources that are available in meeting global energy include gas, oil, coal, Nuclear, biomass, wind, geothermal, biofuel, hydroelectric, solar heat and solar PV (International Energy Agency, 26). Oil which has been in use for decades now happened to be the most dominant source of energy. Globally, Oil consumption is expected to continue increasing simply because an alternative source of energy that has the potential of competing with it is yet to be found (Zilberfarb, 271). Natural gas is expected to grow faster than any other source of energy within the next decade. It is important to note that wide disparity continue to exist on energy consumption among various categories of countries.
In the past Consumption of energy has traditionally corresponded with being the dominant economy (US Congress, Office of the Technology Assessment, 1). However this is expected to change, especially with the recent efforts at generating the greatest wealth with as little energy as possible (Futurist, 1). For instance, as China overtakes the united states in energy consumption, the United States continue to hold the number one position of the world largest economies (Ahuja, & Tatsutani, 1).
The Major Energy Consuming Countries
China is arguably the world top consumer of energy, a position which it acquired mid last year (2010) after overtaking the United States which had monopolized that position for almost a decade (International Energy Agency, 1). The country growing appetite for energy has altered the global energy market and sustained prices of the oil and coal in the last couple of years, a growth that is also expected to have significant long-term implication on energy security of the United States (Soytas, & Sari, 35).
The United States after being overtaken by China stands at number two in energy consumption, something that has been attributed to the global recession which is said to have hit the United States harder that China (Ishiguro, & Akiyama, 25).
The Major Energy Consuming Developing Countries
Developing countries are increasing their energy consumption at a faster rate than before, principally due to the need to expand their economies and the need to improve the living standards of their rapidly growing population (Kebebe, Kagochi, & Jolly, 534). According to US Office of Technology Assessment (OTA), their overall consumption of energy is expected to triple in course of the next thirty years (Stringer, 12). At the top of the list of the world largest consumers of energy in the developing countries category is China which also tops the global list on the same (Clough, 1).
India, another developing countries, is experiencing astronomical growth in its population is another great consumer of energy (World Bank, 45). The only consolation is that India is endowed with a wide range of both exhaustible and renewable sources of energy source that include oil, coal, and natural gas, however it has to contend with the fact that it is endowed with commercial fuels sources which force their needs to be met by non-commercial sources that include animal waste, crop residue and fuelwood (Cleveland, & Ayres, 45). It energy consumption levels have been consistently increasing just like majority other developing and developed countries, something that has been attributed to the economic development and population growth (Lee, 422). Brazil another developing country is also one of the greatest consumers of energy in that a category. It energy needs mainly come from coal, hydroelectric, oil, natural gas, and nuclear majority of which are outsourced elsewhere (Swartz, & Oster, 1).
The Major Energy Consuming Developed Countries
The United States has been the greatest energy consumer in the whole world for a long period, this was before China appetite for energy exceeded that of the United States which on the other hand had been recovering from recession which had a negative impact on is productivity and hence its energy consumption (India Energy Portal, 1). Another reason that has been cited as a probably factor that has necessitated this situation is the United States renewed effort at increasing it wealth at minimal energy (Dunkerley, 56).
Another developed country that has proved to have an extremely large appetite for energy is Japan. Currently Japan stands at number three behind the China and the United States, in the category of the largest consumers of energy among the world most developed countries (Zilberfarb, & Adam, 246). Japan reliance on the other countries for energy is so much such that only 4% of its total energy consumption comes from within its borders (Shell International Petroleum Company, 63).
The European Union which comprise of a total of 27 countries is another of a major consumer of energy. For some time now the energy consumption of this region has averaged 17% of the world energy consumption, with gas constituting the most dominant fuel and the natural oil emerging the fastest growing energy source (Cleveland, 1). Nuclear energy has also contributed a sizeable part of the total energy that has been in use in this region, despite the opposition on the same from some member states that include Spain, Australia, Portugal, and Denmark (Reister, 430). Just like other regions of the world energy consumption is poised to keep on increasing due to the ever increasing energy needs that have to be addressed (Chontanawat, Hunt, & Pierse, 215).
Case Study for Those Developed Countries
In this study we will look at the tax and price levels for automobile fuels in developed counties, the member of the OECD (Organization for Economic Co-Operation and Development). We will look at the issues involved in comparative perspective. We will examine what is commonly known as diesel fuel (diesel and gasoline) in this study. All statistics will be gotten from the Energy Prices and Taxes which is one of the publications of the International Energy Agency; in this case, the 2nd quarter of the 2008 publication will be the main sources.
It is important to note that ordinarily fuel with lead are normally penalized with higher taxes due to their negative ecological effects, which explain why they are not that common in OECD countries (OECD, Organization for Economic Co-Operation and Development, 75). In fact, it is only a matter of time before they completely disappear. Something that is also worth a mention is the fact that pump price are normally broken down in a number of costs, taxes, and margin (International Energy Agency, & OECD - Organization for Economic Co-operation and Development, 25). These elements ordinarily reflect the successive relationship that make up the technical-economic oil chain, which normally goes "from the well to the pump," tax system, of the source country of the energy, cost of production of oil, refinery costs, taxes system in the consumer country, transport cost of the crude oil, and profit expectation of the oil company.
Other than the national specificities, we have two types of taxes that are levied in the country of consumers of these oil products namely; excise taxes and the general sales taxes. This does not however mean that no other taxes can be present, in majority of case you will find all sort of taxes, which might ne intended on account of infrastructure (road pipeline et al). The study examines the total price of fuel, base price, actual price, together with the proportion between the entire three variables. Similar units will be used to express price, the same case with taxes.
First, the study compares tax levels with the current prices of diesel and gasoline of these countries in question (OECD). Secondly, the study looks ate the different trajectories that have been followed since the year 2000 onwards, and especially the relationship with 'energy crisis starting 2000s.'
From this sample it is evident that fuel costs are normally closely related due to the fact that crude oil together with its derivatives usually traded on the international market. This therefore means that differences in prices emanates principally from differences in national fiscal policies (Davoust, 1). In fact it the tax, which varies among countries, which once added on the base price, brings about differences in pump prices. Because of high taxes, pump prices of gas in Germany, Denmark, and Australia, just as is shown in the graph, get elevated in Europe. On the other hand, lower prices in these countries (OECD) are mostly found in North America simply because they are in close proximity to the base prices. Gas price in Mexico whose weak taxes reflect the country subsidizing of fuel are normally modest. Gas is also comparably cheap in Canada, and the United States, despite the double taxation structure in their tax system (federal and states level). In the United States particularly, taxation mostly comprise of a road tax which averages a 10 cent per litre at any given time.
Australia is another country that has a kind of a double taxation system, whose effect is however canceled-out by the existence of a tax credit. In New Zealand, you will find a VAT and an excise tax and a specific tax of 10 cent or less per litre, a tax which normally goes towards the maintenance of roads (Davoust, 1).