12 Cents A Gallon?

9

Looks like we need to invade Venezuela!

From Reuters:

CARACAS, Venezuela (Reuters) – Taxi driver Jaime Tinoco works the streets of Caracas in a 1976 Chevy Nova that guzzles 19 gallons (72 liters) of gas a day. But he doesn’t worry about fuel efficiency — filling his tank costs just

$2.30.

While U.S. consumers struggle with soaring energy prices, Venezuela’s gas is now the world’s cheapest at 12 cents a gallon and Washington’s regional foe, President Hugo Chavez, vows to maintain subsidies that keep fuel dirt-cheap.

“Those gringos have everything — so why does their gas cost so much?” asked Tinoco between chuckles as he navigated a midday traffic jam. “Don’t they have oil reserves?”

Oh…just you wait Jamie. Someday the prices will start to go up because they must. And then we’ll see who’s laughing last. HAHAHAHA!!!

Oh wait. You’re paying 12 cents a gallon? Umm…nevermind.

Listen, if Chavez was really smart, he’d push alternative energy initiatives immediately so gas can stay at this level. Because if the price can stay this low, then Venezuela has a chance to build a vibrant economy. After all, America was built on the back of cheap transportation, i.e. cheap gas.

One last ironic note to this story. It looks as if this gas subsidy is ultimately benefitting who? Ah yes…the people with more money.

Venezuela’s gas subsidy is the subject of endless grumbling by economists who say it promotes consumer waste and costs the state billions of dollars in lost revenue.

Critics say the subsidy largely benefits middle and upper-class vehicle owners at the expense of government income that could be spent on the poor.

“They call it the ‘Hood Robin’ subsidy,” said Jose Luis Cordeiro, a petroleum engineer who writes about energy issues. “Instead of stealing from the rich to give to the poor, it’s the opposite.”

He estimates Venezuela would have taken in at least an additional $8 billion last year — almost 8 percent of the nation’s GDP — if Venezuelans had paid market rates for fuel.

Even more evidence that alternative energy sources would do Venezuela well. But will they listen? Doubt it.

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