When I visited my former college roommate in northern England last summer, one thing that stood out in my mind was the price of gas. My roommate did the math for me (since they sell it by liter rather than by the gallon) and it was about $10 per gallon. Can you imagine spending $150 to fill your tank?
Most of these high prices come from gas taxes, and the idea has been bounced around the US too. It isn’t a very popular idea here, but GM’s “Maximum” Bob Lutz thinks a higher gas tax would help. And this from the guy who declared global warming a “crock of shit”.
Now it isn’t as much of an about face as you might think. But from the guy who trumpeted awesome-yet-inefficient cars like the defunct Pontiac GTO (a rebadged Holden Monaro) and the Chevy Camaro, well, it raises some eyebrows. The market and environment is a lot different now than it was in 2000 though, when Lutz joined GM and said that a 500 horsepower car would save the General from itself. That… didn’t turn out so hot.
Lutz doesn’t even like hybrids, but the world certainly seems to with hybrid sales ratcheting up in 2009. The problem is, if gas prices stay too low, people aren’t going to buy hybrids or fuel efficient vehicles if they have other options. By ratcheting up the gas tax and keeping petrol artificially high, it would help automakers sell the fuel efficient cars the government is mandating they build. 35 MPG by 2020 is a tall but not unreachable order, if you remake your lineup with enough small cars and hybrids to offset bruisers like the Camaro and Cadillac CTS-V.
According to CNN, Lutz said Monday at the Detroit Auto Show that “If the rise in gasoline prices is gradual, I think that all of us in the industry would frankly welcome that, because there is nothing more illogical than forcing fuel-saving technology when gasoline is extremely cheap.” And well, he is right.
Alas, this seems like a bit of a Catch-22 for us consumers. We’re definitely getting fuel-sippers in the near future, but if gas is cheap people aren’t going to buy them in the numbers needed to make much of a profit (American companies historically have a hard time making money on small cars). If people don’t buy fuel efficient cars, they aren’t going to get better and more fuel efficient because people will want the gas guzzlers again. So to help GM sell efficient cars, the government might need to hike gas taxes. CEO of Ford Alan Mulally has also said he supports a gas tax in an interview with CNBC last year, though it should be made clear that Lutz is not speaking for GM as a whole. Just himself.
The AAA fuel gauge report says that the average price of gas is about $2.75, though here in CT it is closer to $3 a gallon. Last year, the average price was almost a $1 less ($1.79 to be exact). The Fed’s already get 18 cents per gallon of gas pumped, and the average state gas tax is around 20 cents.
Would you support a gas tax increase? And if so, how much should gas cost?