On average, how much do federal subsidies for petroleum production subsidize a gallon of gasoline?
On average, federal subsidies for petroleum actually penalize its production at a rate of less than a penny per gallon. For comparison, the federal government subsidizes ethanol at a rate of about 15 cents per gallon and biodiesel at a rate of about $1.58 per gallon. Petroleum subsidies are mainly for environmental reasons and to give domestic and smaller producers an edge over foreign and larger producers. On net, petroleum is not subsidized but penalized because those subsidies and more are billed to other petroleum producers. In addition, the federal government imposes an excise tax of 18 cents per gallon of gasoline, along with other tax and regulatory disincentives to petroleum production.