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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.
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.