There was outrage in the United States recently when the price of gas – or what we call petrol – hit $4 a gallon.

I thought wow, that does sound expensive, especially when you consider it was about half this price 18 months ago.

But then I remembered the exchange rate – and £2 a gallon doesn’t sound too bad after all.

But hold on, a US gallon is quite a bit smaller than an imperial gallon, so is it such a good deal?

So I decided to do this comparison properly – so you don’t have to – and out came the pocket calculator.

The result in rough figures is that motorists in the US are paying about 53 pence a litre for unleaded and 63 pence for diesel – or less than half the cost of fuel in the UK.

This week it was revealed that British motorists are paying an average of 118 pence for a litre of unleaded, and 131 pence for diesel – that’s a stonking £6 a gallon (imperial of course).

Why such a huge contrast? We are both oil-producing nations and we have both been hit hard by the rising cost of oil on international markets.

Yet these figures reveal a more than100 per cent divergence in the cost of one of life’s basic necessities.

In fact this massive gap illustrates a key difference in the relationship between people and government in the US and the UK.

On this side of the Atlantic the government sees its role as punishing the hard-working citizenry by squeezing until the pips squeak, whereas the US government does all in its power to encourage people to use their talents to create wealth.

Nowhere is this clearer than the approach to fuel prices. One key reason why prices are so much higher in the UK is tax. In the UK we pay about 50 pence a litre in fuel duty, and then we pay a further 17.5% VAT on both fuel and duty. The result is a combined tax rate of well over 100%.

Without these punitive rates of tax, fuel prices in the UK would be broadly comparable with the US.

And fuel taxes in the US? It differs from state to state, but on average combined state and federal taxes amount to about 12.4 cents a litre – or a little over 6p!

Even more revealing has been the response to the latest oil crisis. In the US both Republican Presidential candidate John McCain and his erstwhile rival Hillary Clinton promised a three month “gas tax holiday” whereby federal fuel duty would be suspended throughout the summer peak driving months.

Both accept that petrol duty is a regressive tax that impacts much more heavily on the poor.

So much so that both advocated that the state take a $10 billion hit in terms of revenue in order to ease the burden on hard-working families.

And what does Gordon Brown do? He wrings his hands and grovels to the Gulf States in embarrassing fashion begging them to increase production. They of course take absolutely no notice, Meanwhile, Brown is determined to impose yet another two pence rise in fuel duty come the autumn.

Perhaps that is one reason why the US is the world’s most vigorous and successful democracy, while the UK is in a spiral of seemingly terminal decline.

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