Cutting Fuel Taxes Will Exacerbate Oil Crisis

Last week I posted a link to a powerful opinion piece about the West's Faustian pact on oil. But as the oil price spikes continue, and consumers start feeling the pain, pressure is mounting on Governments to cut taxes, increase subsidies, and otherwise help people get around—invariably by car. Craig Bennett over at The Guardian has a great take on why consumers are paying for years of poor transport policy, and argues that cutting fuel taxes would be counterproductive. He also points out that, at least in the UK, it is public transit users that have suffered the most in recent years:"Last month, government figures revealed that that the real cost of motoring - including vehicle purchase - fell by 7% between 1997 and 2010, while bus and rail fares increased by 24% and 17% respectively. And the rise wasn't just under Labour. Between 1981 and 2010 motoring costs fell 10%, while public transport fares rose by more than half."

With motorists feeling the pinch, now is not the time to ease up on taxes argues Bennett—instead the government should invest heavily in public transit, biking, walking and telecommuting—and take advantage of the current spikes to do what should have been done years ago. Kick the oil habit once and for all.

Tags: Economics | Peak Oil

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