Detroit’s dinosaurs live on

What’s the right price for gasoline?

As we know, it all depends on where you’re standing at the time. If it’s 1989 and you’re in the United States, $1 a gallon is obscene. If it’s 2010 and you’re in Eritrea, $9 a gallon might seem pretty reasonable.

But in oil-rich Venezuela, anything more than 10 cents a gallon would be considered highway robbery.

Whereas in the United States, we debate whether to increase a federal gasoline tax that hasn’t been raised since 1993, in Venezuela, the argument is whether to eliminate a subsidy for gasoline that costs the government some $9 billion per year.

Detroit's dinosaurs still roam the streets in Venezuela (photo by esteban via Creative Commons)

A New York Times story today explains how the artificially low prices help keep a motley array of vintage American cars on the road – the proud owner of a ’74 Lincoln Continental calls his car, which only costs about a buck to fill up, “super economical.”

And Venezuelans are no more likely than Americans to take a price increase lightly – the Times points out that higher prices in 1989 prompted riots that killed hundreds of people.

Not that we need to worry about it – a proposal from the president’s deficit commission to increase the tax by 15 cents per gallon won’t be making its way to Congress this year.

Comments are closed.