With oil prices in the $120 per barrel range starting to percolate to the gas pump just as seasonally higher prices kick in, a predictable call has gone up for some gas tax "relief" to help squeezed commuters.
Here's why that's a really bad idea, however well-intentioned:
Gas prices always go up in the summer, due to increased demand from people going out more, travelling more, and going on more vacations. This phenomenon is waggishly called the "summer driving season".
This is happening on top of historically high global demand for oil bumping up against a ceiling to the rate of production, stuck at around 85 million barrels per day.
Due to these two factors, gas prices are going up and motorists are suffering. So what happens if we cut the gas tax to lower prices?
Instead of driving less in response to higher prices, motorists will drive more in response to lower prices.
That aditional demand for oil will further strain a global oil production system already running at capacity, causing prices to go up in response.
As a result, oil prices will end up as high as they are today, only less of that money will go into public transit (via the gas tax transfer) and more will go into the pockets of the oil companies, which already enjoy record profits due to the tight supply situation.
That doesn't even take into account the basic irresponsibility of encouraging people to drive more when we're supposed to be reducing our production of greenhouse gases.
It's a lose-lose-lose tactic that seeks unsuccessfully to preserve the status quo against the predictable consequences of maintaining the status quo.
Instead of throwing more good money after bad, we should be rolling up our sleeves and building cities with rich land use and transportation systems that wean us off our dependence on oil to get anywhere.
You must be logged in to comment.
There are no upcoming events right now.
Why not post one?