The New York Times may or may not follow this blog, but a story today underlines Jeff Rubin’s take on the economics of global oil.
Detroit’s Monsters Thrive on Cheap Oil is the message of Simon Romero’s piece, in which he describes the consequences of Venezuela’s state supported gas prices, which might moisten the eye of drive-in cruising era Americans.
The survival here of so many retro-chic American gas hogs, from Plymouth Valiants to Dodge Aspens and Chrysler New Yorkers, owes partly to the vagaries of Venezuela’s recent history and partly to its oil wealth. Motorists say that they drive these cars simply because they can. They smile when they hear that gasoline prices in the United States average about $3 a gallon, and much higher in parts of Europe.
Venezuela provides what might be the most generous fuel subsidy anywhere. Gasoline, currently less than 10 cents a gallon, is the cheapest in the world, undercutting even Saudi Arabia and Iran, other top oil-exporting nations, according to a study of global fuel prices by the German aid agency GTZ