Figuring out the cost of gas

Americans driving the Alaska Highway in Canada for the first time almost always come away thinking they paid more for gas than they actually did. Converting liters to gallons, then Canadian currency to U.S. dollars almost always shows something less than most people think, though it is probably higher than you are used to paying.

First of all, there are 3.7 liters in a U.S. gallon, so to determine the number of gallons you used, divide the number of liters purchased by 3.7.

The currency conversion is a bit trickier and can change on an almost daily basis, depending on currency exchange rates worldwide. Last summer (2006) a Canadian dollar was worth about $0.90 in U.S. currency. Thus the posted price per liter looked higher than it actually was. The most common price we saw last summer was $1.219 per liter. Multiply this by 0.9 to come up with a value in U.S. currency, $1.097 U.S. per liter.

To reduce it to a simple formula using last year's numbers, do it like this:

(price per liter) x (liters per gallon) x (currency conversion rate} = (cost per U.S. gallon in U.S. dollars)

or 1.219 x 3.7 x 0.90 = $4.06 U.S. dollars per U.S. gallon

Reports from the highway this year have gas in Canada running about $1.169 per liter and as of this morning the conversion rate was 0.94. Using those numbers, 1.169 x 3.7 x 0.94 = $4.07 U.S. dollars per U.S. gallon. Thus there has been little change in gas prices over last year insofar as U.S. residents are concerned, even though it looks like gas in Canada is a nickel per liter (18.5 cents Canadian per U.S. gallon) cheaper than last year.