At the pump, gas prices are “low” now. Remember last May when Chrysler was offering a $2.99 gas guarantee while the price per gallon continued to climb towards $4.00? It seemed like a good deal at the time, but I was quite skeptical, thinking prices would eventually return and that Chrysler must have known that in order to offer this “deal.” Other people considered the era of gas prices lower than $2.00 to be over. Today in New Jersey, gas prices are closer to $1.50 per gallon.
Some experts believe that right now, before consumers begin taking advantage of lower gas prices and buying large SUVs and Hummers again, would be a perfect time to enact a national tax on oil, natural gas, or coal, far up the supply chain. It’s quite possible that this tax would be passed down the line to consumers in the form of higher prices, perhaps amounting $1 per gallon.
The tax would be an incentive for the industry to increase the pace of research and development in alternative, cleaner sources of industry.
ExxonMobil is looking forward to this tax if the other choice is to cap greenhouse gas emissions. I find it unlikely that Congress would pass this energy tax, but anything can happen.
When gas prices were higher last year, it corresponded with a change in driving and consumer behavior across the country. The threat of a recession and the general economic sentiment might have contributed as well. Will keeping the gas price high prevent a return to large cars and trucks even when the economy improves?
Updated October 16, 2016 and originally published January 12, 2009.