While John McCain's idea of a gas tax holiday was a hit in the U.S. (well, it was a hit with him and Hillary Clinton, anyway), the European Commission is saying no in all sorts of languages to the possibility of the EU capping the value-added tax on fuel. Automotive News Europe reports that the EC shot down a proposal by French president Nicolas Sarkozy to cap the tax by saying any such move was the wrong response to high oil prices and would require unanimous agreement anyway. Sarkozy didn't specify how high he thought oil prices should go before the tax cap kicked in, but it doesn't look like he even needs to bother. The EC's stand is that, "changing taxation on fuels in order to combat increasing prices would send the wrong message to producing countries. This would show them that they could increase prices, and citizens would have to pay for this. So that's really the wrong message," Commission energy spokesman Ferran Tarradellas told ANE. Funny, that's not the message we heard when McCain and Clinton were all 'bout the gas tax holiday.

[Source: Automotive News Europe]

If you're trying to conserve fuel, making said fuel cheaper doesn't help the cause. If you're trying to sell cars, making the stuff they run on cheaper might help. But one thing is for certain, not everyone is a fan of Chrysler's new "Let's Refuel America Gas Card."

As we calculated this morning, the incentive will likely only save a driver a few hundred bucks a year. As ABG reader Dan pointed out in a comment on the original post, buyers need to give up any other incentives currently available in order to get the gas card, and some of those deals are much bigger than $1,200 (the gas plan is in effect for three years). Automotive News is reporting that the Union of Concerned Scientists has got their own phrase for the plan: a "cynical deal." Here's the kicker, the Union's statement continues:

But a mere 3-mpg boost would yield the same savings over the 15,000 miles per year typically driven in the first three years of ownership. Over the lifetime of a vehicle, such a fuel economy increase would save drivers more than $3,000. It wouldn't stop saving drivers money after just three years.

Still, Suzuki knows a way to attracts potential buyer eyeballs when it sees one, and has announced its own fuel program: buy a new Suzuki before the end of June and get three months of free - totally free - fuel. Of course, if you think $400 a year isn't a good reason to buy a new car, don't bother doing the math on three months of no cost fuel. The automakers are playing on fears of high gas prices and hope you can't, or don't, do the math.

[Source: Automotive News (subs req'd) via Autoblog]

Ever hear of Pricelock? It's a service for fleet operators to purchase gas in bulk at a set price to buffer the company budget from rising fuel fluctuations. Chrysler thinks that new car buyers should be able to participate as well, through the company's new "Let's Refuel America Gas Card."

Chrysler announced a three-year $2.99 price guarantee on fuel costs to anyone who buys a new Chrysler, Dodge or Jeep vehicle between tomorrow and June 2. Certain vehicles, like SRT models, Vipers, Crossfires and Sprinters, are excluded. Other limiting factors are that you can only buy fuel (regular gas, diesel or E85) that works in your new car and there's an annual limit based on driving 12,000 miles. So, there won't be a lot of hooking up your friends through this deal. The deal works at any gas station because the savings are taken care through a credit card on file with Chrysler; the fuel supplier charges the full price, and Chrysler pays the difference.

Let's calculate this out. Pretend you're about to buy a PT Cruiser convertible. The EPA says it gets 21 mpg (combined). So, 12,000 miles at 21 mpg is 571 gallons. At today's average gas price of $3.61 a gallon, you'll be saving 62 cents a gallon. During the first year, that's $354. Over three years - should gas prices stay the same (ha!) - you're talking $1,000, easy. Is that enough to make you want to buy a Chrysler? In any case, should prices ever dip below $2.99, nothing will stop you from paying for your gas without using the Chrysler-bound card. Get more details after the jump.

Photo by SEIU International. Licensed under Creative Commons license 2.0.

Man, all this presidential candidate pandering is getting out of control. When John McCain first talked about saving the average family $30 on gas taxes over the summer by instituting a "gas tax holiday," it was easily pegged as a pretty dumb idea that wouldn't do much to help with the average family's budget or with America's addiction to oil. Still, calling for lower taxes is a time-honored pander in American politics, and McCain was soon followed by Hillary Clinton in singing the praises of the tax holiday idea. Her plan includes charging the oil companies $8b to pay for the tax holiday, which McCain's doesn't.

Clinton spent the weekend defending her support, and did so in a bizarre way. During an Indiana town-hall meeting, she did not give ABC host George Stephanopoulos an answer to his question about which economists support the tax holiday. Instead, she tried to argue that the lack of expert/economist support for the idea just means that "elite opinion" is against the working class on this issue.

Clinton and her Democratic rival, Barack Obama, continue to fight over the issue today, with Obama rightly calling the holiday idea a "gimmick" (although, as AutoblogGreen readers have pointed out, he did support a state gas tax holiday back when he was in the Illinois Legislature). In a CBS News/New York Times poll that was released yesterday, voters came out against the holiday: 49 percent said it was a bad idea, 45 said it was good.

[Source: Talking Points Memo, LA Times, Washington Post]

Photo by Ewen and Donabel. Licensed under Creative Commons license 2.0.

First, Republican presidential candidate John McCain had the brilliant idea to prove his ignorance of the economy by calling for a gas tax holiday. Basically, he proposed, the federal gas tax (currently set at 18.4 cents a gallon) and the diesel tax (24.4 cents) should be suspended between Memorial Day and Labor Day. Not much later, Democratic candidate Hillary Clinton made the wrong move and backed the plan. Thus far, Democratic challenger Barack Obama is keeping his wits about him and is denouncing the plan.

But what do people who aren't running for president think? It's impossible for us to keep tabs on everyone who discusses the energy issue, because everybody's talking about it. Still, I wanted to point out one bit of media that covers the issue better than any other I've read/seen/heard. Earlier today on the Diane Rhem Show, three guests - Neil King, Jr., The Wall Street Journal's international energy reporter, Roger Diwan, partner, head of financial advisory PFC Energy, Mark Cooper, director of research for the Consumer Federation of America - discussed the gas tax holiday and rising oil prices. I'm not sure which one of the three said it, but one of them called the idea "dumb on all counts." He is not the only critic of the idea (Tom Friedman recently lambasted it); in fact, it seems like just about everyone says it's a bad idea. Diane told her listeners that the show's producer looked long and hard for someone to defend the idea, but couldn't find anyone who was willing. And, while we can't possibly point you to everyone's thoughts on this issue, this morning's Diane Rhem show (listen here) presents a good, hour-long discussion on why McCain and Clinton has grabbed the wrong end of this political stick. Your thoughts?

Photo by Soggydan. Licensed under Creative Commons license 2.0.

Here's an idea only a presidential candidate could love. The presumptive Republican nominee for president, John McCain, today proposed the federal government suspend U.S. gasoline taxes for the summer. On the face of it, I'll admit, there might be a lot of people who love this idea, but it certainly doesn't make a lot of long term sense, either for the economy (isn't our debt high enough already?) or for our efforts to break our addiction to oil.

First, here's the plan: McCain suggests a "gas-tax holiday" that would suspend the federal gas tax (currently set at 18.4 cents a gallon) and the diesel tax ( 24.4 cents) between Memorial Day and Labor Day. Second, let's put this in context and mention that today is when oil prices climbed up and over the $112-a-barrel price for the first time.

Look, it does hurt the wallet to fill up at the pump these days. And calling for relief is a sure way to get people to like you, something most politicians don't turn away from. But, if the tax were removed today, nation gas prices would be around $3.20 a gallon. Is that relief? The next few years (decades?) are going to be painful as we move from gasoline-powered personal transportation to the many and exciting alternatives. High gas prices will help us move to alternatives, as Center for Automotive Research chairman David Cole pointed out last year. Nobody wants to hear this, but it's the truth.

[Source: Associated Press]

Nobody likes taxes. Nobody likes high fuel prices. Combine the two and what do you get? Even higher fuel prices, which nobody likes. This might all seem rather obvious, but it is still relevant considering that there are movements to place higher taxes on gas for a variety of reasons. While many agree that drastic measures may need to be taken in order to wean the American people off of foreign oil, questions remain on just how to do that. Biofuels are an option, but there are significant drawbacks there; electric cars are a popular choice, but scanning the local paper reveals a dearth of current choices in the EV arena.

Consumers have shown that they are concerned about global warming, yet when polled (.pdf link) by the National Center for Public Policy Research, 48 percent of respondents said that there were unwilling to pay any extra at all in gas taxes. The numbers dropped even more when those same respondents were told that their efforts were largely in vain. Duh. We've posted a video after the break from Fox News about this poll, as well as the NCPPR press release.

Currently, diesel prices in the U.S. are slightly higher than gasoline. Across the pond, the story has been somewhat different. With the exception of the UK, diesel in Europe has usually been cheaper than gasoline. This was a consequence of European governments' policies on taxing fuels. Trucks and buses run on diesel, whereas cars traditionally ran on gasoline.

Nevertheless, producing diesel is more expensive than producing gasoline. For instance, according to the Spanish Ministry of Energy report on fuel prices, a metric ton of diesel cost about $826 compared to $803 for unleaded during the past month of January.

What Europeans pay at the pump differs a lot depending on the country, and not only because of taxes. Cost price of gasoline is from 47 euro cents/liter in Sweden to 60 euro cents/liter in the Netherlands. The average EU price is about 53 euro cents/liter. In the case of diesel, prices start at 51.7 euro cents/liter in Bulgaria and top 64.2 cents in Italy; the average for the EU is about 60 cents/liter.

Now let's add taxes. The most expensive gasoline in Europe last January was on sale in the Netherlands. The Dutch paid an average of 1.506 EUR/liter compared to 0.917 EUR/liter in Bulgaria. The average was 1.328 EUR/liter. In the case of diesel, Britons paid the most: 1.463 EUR/liter whereas Bulgarians paid 0.924. The average price of diesel in the EU was 1.234 EUR/liter, still cheaper than gasoline but in 14 out of 27 countries, diesel was more expensive than gasoline in January. The signs point toward a continuation of this trend. Spain's diesel became more expensive than gasoline in March, and both France and Italy seem likely to achieve the same price in the near future.

[Source: Spanish Ministry of Energy]

The video above shows the tragic Minnesota bridge collapse. There were many calls for an increase in gas taxes then and people like Representative Dingell have also called for an increase. Now, the Wall Street Journal reports a Congressional commission will call for a $.40 increase in gas taxes over five years. The report will be made public next week following a two-year study period by the commission. The commission is called The National Surface Transportation Policy and Revenue Study Commission and is made up of a 12-member board made of people from the public and private sector and is chaired by Transportation Secretary Mary Peters.

The report will have an emphasis on the "environment and safety" and even talk about the role the private sector can play. The Journal notes that gas taxes have not increased since 1993 while traffic and cost of road construction has increased dramatically. The report will conclude that if we do not increase gas taxes to support road infrastructure and mass transit, congestion will soar and economic growth will suffer.

These are all very good, logical arguments but PEOPLE HATE TAXES. Even some on the commission admit a 40 cent increase has about the same odds as a snowball does of surviving in heck.

[Source: Wall Street Journal]

A lot of people hate taxes. If asked, would you rather have death or taxes, some people might need a few moments to consider the question. How much of a tax are we talking about, some people might need to ask before answering the question.

A hatred of taxes explains why you often hear people say global warming is real, and taxes are the right solution but don't raise my taxes. There is a 50 cent gas tax bill in the works now, and - I have to admit - I started thinking whether that 90 percent certainty (that humans are causing global warming) that the IPCC is talking about really isn't all that definitive. So, I thought, why not seriously consider some alternatives to the gas tax? Here are two of my favorites;

• Only tax when gas prices are low. A minimum price for gas would allow energy technologies that don't make sense when competing with low gas prices to develop. It would go a long way to answering critics that say gas prices are illegally manipulated anyway. Some states already have minimum prices for ethanol. I think gas deserves that kind of treatment.
• Tax gas but then give it back. Tax gas as much as you like but make the amount tax deductible. The plans vary but the gas tax could also be equal to a cut in payroll taxes, which could use some cutting. No one could complain about a gas tax then because it's not really a tax, it's more of a gas loan. The gas tax rebate has had problems because there really are no "lock boxes" in government for any taxes, and personally, I think I might drive more if I knew it meant lower taxes.

What's your favorite solution to the making gas taxes a little more palatable to a nation that started a revolution over taxes? I actually first heard about the gas tax rebate from a comment at AutoblogGreen. I would really like to hear your comments on this article. Below the fold is a video of David Brooks of the New York Times on the potential of a gas tax. David says no "living politician" would risk supporting it.

[Source: Times Herald]

The Metropolitan Transportation Commission in the San Francisco Bay area is proposing a 10-cent-a-gallon regional gas tax. The tax would be applied in addition to existing state and federal gas taxes and state sales tax. The reason given for adding the tax would be to encourage drivers to go to more fuel efficient vehicles. In order to get the tax, two thirds of the voters in the nine counties in the Bay area would have to approve. The problem is that gas prices typically fluctuate by more than ten cents a gallon and such a small tax is likely to be ineffective for it's stated purpose. If they really want to influence drivers behavior they would need a substantially higher tax increase.

[Source: San Francisco Chronicle]