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Americans are now paying about 0.60 €/litre for gasoline (yes, 60 euro cents per litre) even cheaper than auto-gas (LPG) here. At such a low price I don't think we can see much demand destruction yet, or that a proper assessment of demand elasticity can be made. On one side it is true that the US has ran an Urban Planing policy for 50 years that took out most of the elasticity on transport fuel demand. But I'm not certain that individuals are left without such options as car-sharing (especially among families) and moving closer to the work place.
A second important note to make is that the Federal tax on diesel is actually higher than on gasoline. This is the most inexplicable energy policy I ever witnessed, for it blatantly fosters energy inefficiency. This fact by itself back Jérôme's (and other folks') proposal of further raising taxes on transport fuel in the US. Making gasoline more expensive than diesel can be an important step towards energy efficiency and independence. Vencit omnia veritas.
But I'm not certain that individuals are left without such options as car-sharing (especially among families) and moving closer to the work place.
Yep. People will take on these inconveniences as required. Hopefully we'll see more four day work weeks, working from home in general, and maybe we'll see a move to a renter society for people that change jobs every five years or less.
you are the media you consume.
the Federal tax on diesel is actually higher than on gasoline. This is the most inexplicable energy policy I ever witnessed
That's because the purpose of the fuel tax in the U.S. is to support roadway construction and maintenance, and traditionally heavy trucks burned diesel fuel and also damaged the roads more. Diesel oil used for off-road purposes (e.g., farm tractors) qualifies for a tax rebate.
