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 $1.04 per gallon and biodiesel at a rate of about $2.74 per gallon. Petroleum subsidies are mainly for environmental programs and to give domestic and smaller producers an edge over foreign and larger producers. On net, petroleum is not subsidized but penalized because these narrowly targeted subsidies are billed to the entire industry. In addition, federal and state governments impose an average excise tax of 57 cents per gallon of gasoline, along with other taxes and regulatory disincentives to petroleum production.