American drivers are still paying far less for gasoline than motorists in most other developed countries, even as U.S. prices hover around $4.00 per gallon.

According to The Wall Street Journal, gas in Germany averaged about $8.75 per gallon in March — more than double prices in many U.S. states — while Mexico averaged $5.07 per gallon, with nearly $2 of that tied to taxes.

In the U.S., the national average sits around $4.00 per gallon on Wednesday, according to GasBuddy. That's a slight daily increase but down from $4.08 last week. Prices remain well above last year's level of about $3.15.

Most states are currently below the $4.00 mark, including Oklahoma at $3.32, Kansas at $3.43, and Texas at $3.56. Higher-cost states continue to push the national average upward, led by California at $5.83, Washington at $5.37, and Hawaii at $5.66.

Much of the international price gap comes down to tax policy. U.S. drivers pay roughly $0.60 per gallon in combined federal and state taxes, while fuel taxes in Europe often account for 50% to 60% of the total price, according to S&P Global Energy data.

Those higher taxes frequently fund public transportation systems and broader government spending, whereas U.S. fuel taxes are primarily directed toward highways.

The U.S. also benefits from its position as the world's largest oil producer, a shift from the 1970s that has reduced reliance on imports and exposure to global supply shocks.

Still, international events continue to influence prices. Tensions involving Iran have pushed U.S. gasoline prices to their highest levels in four years, underscoring how global disruptions can ripple into domestic markets.

Price differences are also shaping consumer behavior. In northern Mexico, some drivers cross into Texas cities such as El Paso and Brownsville to take advantage of lower U.S. gas prices.

Some U.S. states, particularly California, have added environmental and carbon-related costs that increase prices locally, though those policies remain less extensive than in Europe.

Oil prices could decline if geopolitical tensions ease. President Donald Trump signaled Wednesday that a second round of U.S.-Iran talks could take place as soon as Friday, while Pakistani officials pointed to ongoing mediation efforts aimed at restarting negotiations and ending the conflict.

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