Fortunately ... the International Center for Technology Assessment had done a detailed analysis, entitled "The Real Price of Gasoline". The group calculates several indirect costs, including oil industry tax breaks, oil supply protection costs, oil industry subsidies, and health care costs of treating auto exhaust-related respiratory illnesses. The total of these indirect costs centers around $9 per gallon, somewhat higher than the social cost of smoking a pack of cigarettes. Add this external or social cost to the roughly $2 per gallon average price of gasoline in the United States in early 2005, and gas would cost $11 per gallon. These costs are real. Someone bears them.
- Lester Brown, in Plan B 2.0

The best long-term solution [for America's heavy oil dependence - DK] - for America as well as the world economy - would be higher petrol taxes in the United States. Alas, there is little prospect of that happening.
- "The Oiloholics", in The Economist, 27 August 2005

Low fuel prices allow motorists to purchase vehicles based on infrequent peak demands, such as vans, trucks and SUVs that have carrying capacity, power and off-road features used only a few times every year. It is more efficient to own fuel-efficient vehicles and to rent special vehicles to meet these occasional needs.
- Todd Litman, in a footnote to Appropriate Responses to Rising Fuel Prices

The economic theory underlying road user charging was first proposed by a Frenchman, Dupuit, in 1844. The concept was that users of a transport system (in Dupuit's case, canals) should be charged a marginal cost as and when they used it and that the revenues should be invested in improving the system up to the point at which the marginal benefits of so doing equalled the marginal costs incurred.
- Malcolm Buchanan, in his paper to the AITPM 2003 National Conference Achieving sustainable land use and transport systems ... Time to stop deluding ourselves and face the choices

Thus, concentrating on evidence that has proved to be consistent across studies, we can draw out three central conclusions from our survey of the literature and highlight some of their implications.

• There are differences between the short- and long-run elasticities of fuel consumption with respect to price. Typically, short-term elasticities are in the region of -0.3 and long-term between -0.6 and -0.8. Therefore, it may be right to say that "it won't make much difference" or "people will use their cars just the same", but only in the short run. The evidence is clear - and remarkably consistent over a wide range of studies in many countries - that in the long run there is a significant response, albeit a less than proportionate one.
• Both long- and short-term effects of gasoline prices on traffic levels tend to be less than their effects on the volume of fuel burned. The short term elasticity of traffic with respect to price is about -0.15 and long-term about -0.30. So motorists do find ways of economising on their use of fuel, given time to adjust. Raising fuel prices will therefore be more effective in reducing the quantity of fuel used than in reducing the volume of traffic.
• The demand for owning cars is heavily dependent on income. The long-run income elasticity of fuel demand is typically found to fall in the range 1.1 to 1.3. Short-run income elasticities are between just below one-third and just above one-sixth in magnitude: elasticities are normally estimated in the range 0.35 to 0.55. The implication is that fuel prices must rise faster than the rate of income growth, even to stabilise fuel consumption at existing levels.

- Daniel Graham and Stephen Glaister, summarising their findings from a survey of elasticities relevant to the demand for automobile fuel, in the Journal of Transport Economics and Policy, January 2002

Vehicles classified as off-road 4WD's - which are all imported - attract an import duty of just 5 per cent, compared to 15 per cent for conventional passenger cars. This started as an attempt to pork-barrel the bush, but has become a suburban bonanza ... The former Opposition Leader, Kim Beazley, floated the idea of raising the tax on 4WDs during the 1998 election campaign and copped copious flak from urbanites who think they have a God-given right to a "primary producer" discount on a vehicle with two-tone metallic paint and leather trim.
- Tony Davis, writing in the Sydney Morning Herald on 30/7/02.

[Underpricing] gives drivers a competitive advantage in obtaining jobs, education, housing, services, safety and status over non-drivers.
- Todd Litman, Transportation Cost Analysis

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