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Showing posts from November, 2008

A great time to end fuel subsidies

Many countries control the price of motor fuels.

This got their budgets into deep trouble in the first half of 2008. The high price of oil caused massive budget blowouts. Malaysia, Indonesia, China and India among various others faced the politically painful necessity of raising gasoline and diesel prices or face deep budget cuts.

Yes, the parking lot is Giant too!
Cheap fuel, cheap cars and cheap parking have helped create a
remarkably car-dependent landscape in Malaysia's urban areas.
But what should these countries do now that the price of oil is way down near US$50 per barrel? Unfortunately some are cutting fuel prices again. The Indonesian Government will cut the price of gasoline from Rp6000 to Rp5500 per litre on Monday. India probably will in late December. Malaysia has already cut the price four times since its big June price rise.

Isn't this a bit short-sighted? We all know how hard it will be to raise prices again if (or when) oil prices rise again.

Would it not be smar…

From fuel taxes to 'pay as you drive'

The US has started trials for distance-based charging mechanisms aimed at ultimately replacing the gasoline tax.

Motorists in several US cities are being recruited to try out a new mileage-based road user charge system. The Public Policy Center of the University of Iowa is leading the trial. This is very good news (although I realise this trial is only the first step in a very long process with no gurantee of political success).

Smart folks like Bern Grush and Robin Chase have been calling for usage-based pricing for a long time and pointing out that motor fuel taxes are gradually failing us. The Netherlands, Singapore and the UK apparently have plans for distance-based charging too. Germany and Switzerland already charge heavy vehicles based on distance and weight.

There are spin-off opportunities here. I hope they don't get missed!

It would be natural for people to be suspicious about having 'extras' that piggy-back on a new user charging system. But I think it would be a gr…