Sunday 22 Jul 2018 | 12:29 | SYDNEY
Sunday 22 Jul 2018 | 12:29 | SYDNEY

The petrol riddle


Sam Roggeveen


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.