High oil prices have once again sparked debate over whether governments in the United States, Europe, and Australia should suspend, reduce, or eliminate taxes on motor fuels such as petrol and diesel. Elimination of these taxes, however, would harm the public more than it would help it. With oil prices hovering around US$130 per barrel and gasoline prices in the United States surpassing an average of US$3.79 (RM10) per gallon, policymakers everywhere, under pressure from constituents, seem to be reconsidering taxes on petroleum.
Removing petrol taxes will do little to mitigate the fundamental factors behind rising oil prices: preferences for more and larger cars, urban sprawl, billions of dollars in oil and petrol subsidies, and the role that un-priced externalities play in the price disparity of petroleum.
1 comment:
Need to let prices be driven by the market.
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