June 05, 2008
And so it Begins...

After years of big subsidies, India is being forced to raise fuel prices. This is one of the 800 pound gorillas which is actually causing the spectacular and sustained rise in gas prices. The other is China. Both heavily subsidize fuel prices, helping their countries sustain spectacular growth rates, but at the same time insulating their populations from supply signals prices provide. They do not conserve, they do not become more efficient, because they have no incentive to do so. And, as long as their respective governments continue to insulate them, they never will.

The story was, of course, buried deep inside the Post. I wouldn't be surprised to find out it wasn't reported at all in other places. It doesn't fit with the "it's the Evil Oil Companies / Vast Right Wing Conspiracy / Wasteful Lazy SUV-driving Americans that cause our suffering!!!" theme. It's not us, it's them, and until economic pressures squeeze their government subsidies on fuel out, things won't change.

Of course, Indian people aren't really that much different than American people or European people or any other people, so instead of bucking up, tightening their belts, and using less fuel, they're raising hell, blocking traffic, and jangling the cage of every politician and reporter they can get their hands on. It'll be even worse in China, because that nation does not have the mechanisms in place for peaceful regime change or even (relatively) non-destructive civil disobedience.

In other words, it's not over yet.

Posted by scott at June 05, 2008 10:53 AM

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Will the 21st Century become known for its Fuel Wars?

Stay tuned...

Posted by: Mark on June 5, 2008 12:42 PM

It's possible. With China and India becoming so incredibly dependent, not to mention the rest of the developed world, there's certainly bound to be some friction. However, unlike the rest of the developed world, China and India lack the ability and infrastructure and capital necessary to cope.

Here, we could introduce electric commuter cars, scooters, and the like without too much problem. Things like the Chevy Volt would work quite nicely if mass-produced, especially with some minor work towards charging during non-peak hours. The potential for home-grown sources like this with the other different methods that are popping up, it's very likely we could make the switch to a new/different methodology fairly quickly.

Europe also has a well-developed public transportation system they can leverage along with automotive advances.

China and India are more likely to not be able to cope and thusly need to get supplies, leading to wars.

Land wars and Asia don't go well, either.

Posted by: Ron on June 5, 2008 12:56 PM

Land wars and Asia don't go well, either.

Just as Vizzini pointed out in The Princess Bride*...along with "Never go in against a Sicilian when death is on the line!" :-)

* the actual quote being, as we all know, Never fight a land war in Asia!

Posted by: Mark on June 5, 2008 06:24 PM
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