[Leica] Re: Gas prices and behavior

[lrzeitlin at optonline.net (Lawrence Zeitlin)]

On Aug 2, 2007, at 11:27 PM, Ric wrote:

> The $2.65 does not count the billions of dollars we drop on propping
> up our oil industry with tax breaks (corporate welfare) and a
> military defense (domination) in the Middle East. When our true costs
> are added to the what the pump says, we pay a comparable amount to
> the rest of the world.
>
> Ric
>
>
> On Aug 2, 2007, at 10:19 PM, Jayanand Govindaraj wrote:
>
>> I think $2.65 a gallon is unbelievably cheap.... I pay over $5 a
>> gallon.


One of my friends, an economist at the University of Wales, told me  
that the high petrol prices in the UK are based on a conscious effort  
of the government to reduce the transportation burden on the economy.  
After WW2 the Brits opted for larger cars, just like in the USA. It  
was the era of Jaguars and Daimlers, forget the Austin 7. The M  
series motorways were built and the car culture took off. To control  
this wild expenditure, petrol tax and automobile licensing policies  
were shifted to discourage profligate motoring. But it was not until  
the price of fuel at the pump hit the $4 level that any significant  
reduction was seen. At that price, assisted by car registration fees  
that penalized engine size, the Brits opted for smaller cars. They  
don't drive much less than they used to but the cars are smaller and  
get better fuel consumption. The tax on cars with engines smaller  
than 1 liter is half that of larger cars. Our bright red SEAT, a  
Spanish version of the Fiat, had a 960 cc. engine, but could keep up  
with 85 mph traffic on my weekly trips from Bangor to Manchester.

A similar impact on motoring in the USA would probably require  
gasoline prices to exceed $6 a gallon. The price of fuel really has  
to hurt before people change their driving behavior. We gripe but  
easily adapt to minor inconveniences. Today's news commented that  
interest in hybrid cars, which peaked when gasoline reached $3 a  
gallon, has already started to decline. The Toyota Prius, once had a  
6 month waiting list, but now is in plentiful supply on dealer's  
lots. Given the pressure of the auto and oil company lobbies,  
mandated fuel economy measures are a very hard sell. We love our  
pickups and SUVs.

Larry Z