Government subsidies mark oil more expensive for everyone

[skipster]

Where gasoline is cheap, and why it's making yours pricey

Friday May 4, 3:12 pm ET

By Steve Hargreaves, CNNMoney.com staff writer



In Saudi Arabia gasoline costs about 45 cents a gallon. In Iran it's 33. Venezuelans pay under a quarter.
These absurdly low prices are a direct result of massive government subsidies.

While these numbers are not adjusted for cost of living, it's fair to say that drivers in those countries are getting a good deal.

http://biz.yahoo.com/cnnm/070504/050...pf=family-home

Stew on this line: "A subsidy tells consumers they don't need to adjust their behavior," said Spector.

This says a lot for those who think that capitalism is just an economic system. It is human behavior, even across multiple economic systems.

[Big]

Government subsidies mark oil more expensive for everyone

Wrong! Oil companies have been making historic profits.

[skipster]

Read the article!!

[Big]

How is 33 cents per gallon in a country that owns the oil (Iran) a good deal when their average salary is $1,200 per year or about 30 times less than in America?

The country is in a poor economic state and its associations with both international terrorism and a potential nuclear capacity are unlikely to aid it. While certain European countries seek to normalise relations the US is still hostile. Average salary in Iran, is about 1200$/year.

http://www.iranmania.com/Information...on/History.asp

[Big]

Your article is crap, geared for some imbecile Americans.

[skipster]

Your article is crap, geared for some imbecile Americans.

Hang on, there, Tex. It's not MY article. I didn't write and I didn't endorse it. I just posted it. If you don't agree with it, tell us about it, but don't call it MY article.

If you want to bedate the merits of the story, we can certainly do that. Is $0.33 per gal. a good deal? Maybe not for the guy who makes $1200/yr, but he probably doesn't have a car, either, so gasoline at any price is not a good deal for him.

The point the article made was that the government price supports (socialistic practices) in these countries interfere with human behavior and decision making. Consumption in places like Saudi Arabia (where more people can afford or could even use gasoline) is rising very quickly. In a free system (without subsidies), the price would fall where it may and a rising price would help curb consumption. This is not happening, however, and those socilaistic practices are increasing oil demand, which increases oil prices.

Someone on another thread states that Americans don't have a lot of economic knowledge. I guess immigrants should feel right at home, then, because the ones on this board have even less.

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Skipster, in our "free" system where does lobbying lawmakers fit in. If it is just buyers and sellers then why are there so many lobbiests?

[Big]

Maybe not for the guy who makes $1200/yr, but he probably doesn't have a car, either, so gasoline at any price is not a good deal for him.

Dude, you are as arrogant as anyone can get. Why do you think average Iranian doesn't own a car? Iran makes its own cars, very cheap and affordable.

As of 2001, there were 13 public and privately owned automakers in Iran, of which two - Iran Khodro and Saipa - accounted for 94% of the total domestic production. Iran Khodro, which produced the most prevalent car brand in the country - the Paykan, which has been replaced in 2005 by the Samand -, is still the larger with 61% of the market in 2001, while Saipa contributed 33% of Iran’s total production in the same year. The other car manufacturers, such as the Bahman Group, Kerman Motors, Kish Khodro, Raniran, Traktorsazi, Shahab Khodro, and others together produced only 6%.

http://en.wikipedia.org/wiki/Economy..._Manufacturing

[skipster]

Maybe not for the guy who makes $1200/yr, but he probably doesn't have a car, either, so gasoline at any price is not a good deal for him.

Dude, you are as arrogant as anyone can get. Why do you think average Iranian doesn't own a car? Iran makes its own cars, very cheap and affordable.

As of 2001, there were 13 public and privately owned automakers in Iran, of which two - Iran Khodro and Saipa - accounted for 94% of the total domestic production. Iran Khodro, which produced the most prevalent car brand in the country - the Paykan, which has been replaced in 2005 by the Samand -, is still the larger with 61% of the market in 2001, while Saipa contributed 33% of Iran?s total production in the same year. The other car manufacturers, such as the Bahman Group, Kerman Motors, Kish Khodro, Raniran, Traktorsazi, Shahab Khodro, and others together produced only 6%.

http://en.wikipedia.org/wiki/Economy..._Manufacturing

You're trying to tell me that gasoline is too expensive for the average Iranian (even though Iran makes its own oil), but that a car is not too expensive because Iran makes its own cars? What kind of logic is that??