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Why We Need Higher Gas Prices

Funds are needed for transportation infrastructure. The U.S. and most States were reluctant to raise gas taxes a few cents or index them to provide the funds. Virginia, where I live, is a good example.

Then oil prices and gas prices went crazy. The demand for gas was inelastic, given the great distances we drive from home to work or any common event. (Walking is done on a treadmill watching TV. Some drive to the gym to walk. Suburban development since the 1950's has made walking impossible. That's where real cities do have an advantage.)

The money that could have been raised by a nickel or dime fuel tax ended up in the Middle East as an up to $2.50 supply shortage price premium was paid. Had there been a tax that leveled cost over time, more of that money would have stayed here. It represented an opportunity lost. Our potential road improvements ended up in the Arabian sands.

Commodity markets are small. They do boom and bust, particularly when they attract spec money. A flexible rate fuel surcharge that would keep the per gallon rate about $2.99 - (still cheaper than bottled water or bistro coffee) would build resilience by requiring a focus on fuel efficiency.

Distribution and marketing cost for fuel have ranged from 8% to 12% in the past according to data at the PTS Blog: peltiertech.com/WordPr.../

The current accounts adjustment in the infrastructure revenue share would adjust to total costs. A mark-up range would allow competition at the pump.

For low income or other hardship situations a tax credit or partial rebate could be offered. A high percentage of transactions are by credit card, so it would be an option to track gallons of use by date for comutation of a credit.

Cheap commodity prices lead to over-indulgence. High commodity prices to cold turkey withdrawal. We've recently been turkeys. For the good of the flock, I think we should organize to limit recurrence of that.