Thursday 22 Feb 2018 | 19:30 | SYDNEY
Thursday 22 Feb 2018 | 19:30 | SYDNEY

The petrol riddle



1 May 2008 14:56

Via the Observing Japan blog, I see that the Japanese Government is set to end its gasoline tax holiday. This comes soon after Republican presidential nominee John McCain proposed a similar measure for the US, which Hillary Clinton has backed and Barack Obama won't. The McCain proposal does look like a stunt and it is probably bad policy

It is somewhat mysterious how politically sensitive fuel pricing can be in first-world countries like Japan and the US (and Australia). As recently as 2004-05 (the most recent figures I can find), Australian fuel bills accounted for less than 3% of total household spending. This IHT story says it's 6.1% in the US (I can't find figures for Japan). Yet politicians and the media spend inordinate time on the issue, and I can only think it is because fuel pricing is so obvious to consumers — we don't even have to get out of our cars to note increases and compare prices.

One further point: as American blogger Virginia Postrel points out, the public discussion of petrol pricing is conducted overwhelmingly in terms of its social impact, and is largely divorced from the environmental debate.

You may also be interested in...