Worst. Social policy. Ever!


Imagine a candidate who went to the country with this message:

Compatriotas! When I am president, I will finally spread the oil wealth fairly. What I’ll do is, I’ll split the country up into four income brackets. To each of the richest 25% of households, I’m going to send a check for Bs.11,000 once a year. And to the poorest quarter of the country’s households, I’m going to send Bs.1,770. Vote for me!

Crazy, huh? That guy would get creamed in any election, right?

Except – and if you couldn’t see this one coming, you’re a little slow on the uptake – that’s pretty much what chavismo is doing now!

The gasoline subsidy is a Conditional Cash Transfer: the condition is driving.

Kudos to Ecoanalítica for running the distributional impact numbers. May el que te conté grab us right after confession.

[And while I’m on rant mode, here’s another thing: the most pernicious thing chavismo has done to the country over the last 13 years isn’t so much imposing insane policies like this idiotically regressive subsidy, the most pernicious thing it’s done is undermine our ability to talk about them rationally. Honestly, isn’t it bizarre how it’s become impossible to have an even minimally logical debate about this reality in the 2011 vintage Venezuelan public sphere?]

Caracas Chronicles is 100% reader-supported. Support independent Venezuelan journalism by making a donation.


  1. Political Suicide. Unless it’s done by someone who can do no wrong in his followers’ eyes. I don’t know, someone who can give a folksy, long-winded explanation as to why it’s needed.

    I think I mentioned it once in this blog, but the government can issue a card that gives free gas, up to X Liters per month, and paying full price after that. This will make middle and upper classes buy higher efficiency vehicles. Maybe they can also introduce a kind of Cesta-ticket for additional Gas purchases for lower income classes.

    • You know, I think this Political Suicide line is outdated.

      I think people understand perfectly well that paying Bs.0.10 – dos puyas, coño! – is insane.

      I think people grasp that through plain old common sense, right around the time they realize that they just paid more tipping the attendant than they did for the gas itself.

      I think the “Political Suicide” line turned from cunning socio-political analysis into lazy excuse for inaction long ago.

      And I think the opposition needs to grow a pair on this issue.

      • I don´t know. I´ve heard in 2011 people saying that gas has to keep its price because it´s the only benefit about living here. In the end, it´s plain old opportunism. The same goes to the “fair prices” law, nobody, excepting economist said anything. People love cheap-free stuff even if it isn´t sustainable.

        • The question is always to do with your baseline for comparison.

          If you compare giving Bs.11,000 a year to the richest 25% of households and Bs.1,770 a year to the poorest 25% with not giving anything to anybody, it’s political suicide.

          But if you compare it to giving Bs. 11,000 a year to the poorest 25% of households and Bs.1,770 to the richest, suddenly it becomes political suicide not to do it.

      • My favourite quote about Venezuelan politics comes from José Ignacio Cabrujas, and is reproduced near the beginning of Coronil’s ‘The Magical State’: ‘It would be suicidal for a presidential candidate in Venezuela not to promise us paradise, because the state has nothing to do with reality. The state is a magnanimous sorcerer … Oil is fantastic and induces fantasies.. (etc.)’. In fact, once you’ve understood the quote, you don’t really need to read the book. I’ve seen nothing so far to indicate that this situation has changed significantly. Maybe you’re right and the opposition can change it. Let’s hope so.

    • Maracaiburgh,
      Consider you give a “gasoline cesta-ticket (GCT)” for each adult (>18 y), and full price is fixed at 2,7 Bs/l (following A. Olivero’s table).

      We can play a little with the numbers:
      Estimated Gasoline consumption : 275 000 Bls/day = 43,7 MM l/day
      Number of voters is around 18 MM people, so the current consumption is around 73 liters per adult in a month.
      You can give a GCT for 50 liters “free” for each adult every month. Direct transfer = 100$ * 50 l / 159 l/br = 31,5$/month/adult

      You can sell, exchange or give this, no problem.
      If you don’t have a car, you will sell your GCT ticket. If you have a big car, 50 l/month is not enough, you have to buy a ticket or pay full price for some extra 50l/month. You can guess that the GCT price will be at least at 2 Bs/l so 100 Bs per GCT/month.

      This direct cash transfer depends on gasoline price so higher prices = most people happy (60%-70% of no-car owners). You can eventually reduce the liters per GCT and compensate the cash trasfer by higher gasoline price.

      • Of course. It’s just a matter of being creative about it.

        But also clearheaded: we now run a Conditional Cash Transfer that incentivizes polluting the air, congesting the roads, warming the planet and wasting our resources. And so polluted air, congested roads, warming planets and wasted resources is what we get.

        If we ran a Conditional Cash Transfer that incentivizes sending poor children to school, educated poor children is what we’d get.

        To say we’re “not mature enough” to get rid of a policy as demential as this one is to say we’re not mature enough to have a decent society. I call bullshit on that.

        • Francisco,
          I agree but for too much people free-gasoline is “lo que nos llega de nuestro petróleo”. So, we can keep this link with “nuestro petróleo” and at the same time, create incentives for energetic efficiency.
          For this reasons, this kind of mechanism could work: Little by little, you reduce the global amount of subsidized gasoline. At the begining, 50 l/person instead 73 l. The extra 23 l/person/month (86 kBls/day) could give you enough money (3 billion $/year) to improve the public transportation system, schools or universities. At the same time, a family with two cars could prefer to use only one car and avoid to purchase extra GCT, buy a bike, etc… but at the same time, each month they have their “gota de petróleo”

      • sent you a larger image, quico, through your gmail a/c. Lettering suffered in the process. (jpeg manipulations/resaves cause losses). There’s a way to somewhat correct that, but for the purposes, the enlargement may do.

  2. I always remind people: Rafael Caldera with low popularity, managed to increase gradually the price of gasoline to FOB price. Given Chavez eternally high popularity, it should be a piece of cake for him to do it.

    • It takes courage to do something sensible but completely unpopular (Profiles in Courage, anyone?). Chávez is a coward, as we all know. So his avoiding making the right choices is very much in character.

    • Maybe that’s why Leopoldo Lopez is saying he’ll only run for 1 term.

      He knows that there will be hard decisions to make.

    • Just don’t do it as CAP attempted to do it with el paquete…we shall remember what happened with the bus fares the very next day in Guarenas and La Guaira…

  3. I just love the comparison that for the price of 5 litres of Agua Mineral I can buy 200 litres of gasoline.

    Or for the price of a 250 ml can of Polar Light, here in Margarita, I can buy 55 litres of gas.

    Etc., etc…

  4. It may appropriate, it may be a sane policy, and God knows it´s about time we did something about that, but none of that cannot take away from the fact that it will be hugely unpopular. Anyone trying to implement a policy whose goal is to raise gas prices up to at least the cost of production is setting himself (herself) up for a lot of trouble, and also for a whole lot of cheap shots from the opposition. This is a policy that is such easy prey for demagoguery that I really do think that it is still close to suicidal. Forget one minute about the fact that is the right choice.
    I would prefer to deffer this in exchange for an overhaul in our institutions, mainly those related to justice, the sale of our huge array of money losing public companies, putting in order the economy and great deal of other priorities. Is this important? sure it is, but is it worth endangering the transition? I do not think so. We are not ripe for this yet.

    • Again, the implicit assumption here is that you withdraw the gas subsidy and put nothing in its place. That would certainly be unpopular.

      But there’s no reason to do it that way. If you compare the current policy to its opposite – giving Bs. 11,000 a year to the poorest 25% of households and Bs.1,770 to the richest – suddenly it becomes political suicide not to do it.

      • The devil is in the details. people are not going to take lightly an increase in the price of an almost free commodity. Transport prices will rise and that will have a ripple effect throughout the economy. You can place other subsidies on transportation, but that will only muddle and complicate the situation even further. It´s not that I don´t understand the situation, I do. I know the current prices are regressive, and I am aware of what Torres says (the money coming form our oil sales and not from taxation), but nonetheless unless you have a plan for doing this that will make it palatable, painless and 100% safe I really think that it is suicidal.

        • Think of all the money that putting and keeping all the subsidies and price controls in place entails, money that could be spent on other things… The simplest solution –and I love simple– is to distribute the oil revenue cash equally, daily to each citizen. If you do this, you can eliminate all subsidies and remove all price and exchange rate controls and still obtain zero poverty, all while reactivating the market and getting even the poorest to start using banking services, which, as Quico has pointed out in the past, is correlated to saving and better use of other financial instruments.

          In a nutshell, eliminating gasoline subsidies is a political goldmine if done in conjunction with cash distribution, especially conditionless.

          • The money quote here is “eliminating gasoline subsidies is a political goldmine if done in conjunction with cash distribution, especially conditionless”. I am sold on CCTs. I am all in favor of this.
            So I would really debate this the other way around. First we esablish CCTs, and then we can get around to fixing the rest of what is wrong with Vzla. Isolated policies won´t get us too far. Fixing the price of fuel as an isolated policy is not only dangerous but also complicated and cumbersome.

  5. Pernicious as the gas subsidy described is, it’s actually worse than described if you consider the source of the money for the subsidy: oil money, not tax money. As I’ve mentioned often, spending money from oil that belongs equally to all citizens is tantamount to taking an equal amount of money from the richest as from the poorest. The gasoline conditioned cash transfer that you describe here is on top of the regressive taxation of using oil money to pay for it.

  6. Instead of gas subsidy, why not improve our education?. Our best University (USB) “está detrás de la ambulancia” (ranks 32nd), according to the QS University Rankings: Latin America http://usbnoticias.info/post/10348

    According to this rank, Brazil, Chile and Mexico have the top 5 universities in LAT, including the public Mexican University (UNAM).

    • How do you improve universities if half the population doesn’t really know how to read or solve a simple equation? Fix things firstly. Universities spent too much effort trying to fix what should have been put in place early on.
      Spending in the Venezuelan education system, by the way, is more than elsewhere focused on universities…since the seventies.

  7. Excellent post.

    Now, I am not so sure most people will react so calmly about this unless there is a clear campaign beforehand. People are not stupid but they are highly ignorant. Francisco says people already understand it’s madness when you pay more in tips than in petrol. But then: that’s for the people who pay tips and tank their cars. Most people buy arepas and empanadas, they use buses and they just haven’t done the maths. And if you announce something like this, Chavismo wil tell people we want to increase bus prices by 10000%. We need to explain it is not like that.

    I have written about this before: we need to announce firstly public transportation prices will remain the same and a new scheme will be implemented whereby buses will get so many litres of petrol per day, etc. We will have to explain very clearly that the state should not be paying for the rich to drive their cars but for books all the way to the end of bachillerato and medicine in the hospitals.

    You will also have to think ahead about what’s going to happen with the couple of hundred thousand people who are living now off petrol smuggling in Táchira, Zulia, Sucre and Southern Bolivar plus Amazonas.

    It’s possible but you need to really spend quite some time explaining it all.

    • Kepler I agree.
      The key is in “public transportation”. Besides the metrobus in Caracas, is there any other bus system in the country that is actually public?
      As far as I remember, all the camioneticas are privately owned, so they do as they wish (not too sure if they have price controls, I would assume so).
      So before eliminating the subsidy to gas, I believe that the public transportation system has to go through a major reform, make it actually public, so the government can control fare prices, even subsidize it.
      That way, the poor won’t pay the toll, and the people that can afford to own a car, will pay a fair price for gas.
      Am I too far off?

        • You just hit the nail on the head. Transportation mafias.
          Chavez is the master of the expropriations. Expropriating the private transportation companies should be an easy piecy for him…
          Oh, I forgot he is a coward…
          So regarding public transportation we are hooped. Mafias that control the majority of the system, an deficient metro admin system that has not been able to keep up with the demand, trains that crashed because they were being operated manually (so I been told)…
          I think it’s not going to be easy to raise gas prices without solving all these first and giving an alternative to people to go to work.

    • I tend to like this way of looking at the issue. I disagree on the litter per unit limit however. Though with all the savings you could potentially create controls to make make it harder for drivers to abuse this. Let public transport, camioneticas, taxis, jeeses have cheaper gasoline. In essence anyone that makes driving other people around their business. That way you benefit those who don’t have a car.

      The interesting question is at what point does it become more profitable to fill my camionetica up and siphon it all out and sell it in the now new black gasoline market. Depends on the price differential. Hell, it’s also safer for me as a driver to stay in my house and sell gasoline than drive around picking random people up so add that to the ‘profitability’.

      Someone said diesel which sounds good but generators, fishing boats and other large machinery works with diesel as well so there is a market for that too.

      Sounds to me like another parallel market waiting to be created.

  8. The price of Metro de Caracas single-trip ticket was raised from Bs. 0,50 to Bs. 1,00 in June and will be raised again to Bs. 1,50 in December, and there was no fuzz about that.

    • OK, but you can say bus prices won’t increase. I am sure Chavistas will announce that if petrol prices are going up 100%, bus prices will algo go as much. And remember: El Metro is not Venezuela. Dynamics are completely different. The vast vast vast vast vast vast majority of Venezuelans regularly take the bus.

      • The vast vast vast vast vast vast majority of Venezuelans regularly take the bus.

        Diesel? If so, subsidize diesel and lower grades?

  9. Hi Francisco,

    While I agree that gasoline prices are serving as Conditional Cash Transfers when we take into consideration only car drivers. I don’t think that is the reason for the lack of increases. I am more inclined to think that the reason gas prices aren’t increased is because of the chain reaction it will have on other prices.
    a) If you increase gas prices then bus tickets have to increase,. Who gets this benefit? not the 25% rich…
    b) If you increase gas prices then cost of transportation of goods across the country will increase. Again who will see the biggest impact here.

    Now, having said that it makes no sense to subsidize gasoline at the rate that we are doing it. If the government plan for GNV had worked then we could take (a) out of the equation since transportation (either buses or taxis) would use GNV.
    To solve the issue of transportation of goods it a bit trickier. You would need a good alternative infraestructure to do so, and while building a rail network is the appropriate solution for this the speed at which is going is not.



  10. I agree with Maracaiburgh and Causetoujour. The only alternative of the government to doing nothing is a rationing card scheme, like that already in progess in Iran. A progressive increase in gas prices at the pump would take too long, because, for example, a full 100% increase would be politically crazy, a suicide, yet so little (what’s 100% of almost zero?). So it would have to be a long series of monthly, undetectable increases, say 25%, during four years or so, to begin to see a change.

    The problem is that a rationing card is an awful alternative because you can just imagine the corruption that it will create, with people getting extra cards from some friend at the Ministerio, or entire groups being denied the cards because of some political sin (they used to do that during Lusinchi with the RECADI dollars for newspapers). Come to think about it, the rationing cards would be a wonderful plan for unscrupulous governmental “enchufados”.

    • César,
      Another alternative: a tax for car ownership. This tax will compensate average yearly consumption for cars. Big tax for SUV and high-consumption vehicles (Bs. 11.000?), no tax for bus, taxis o trucks. Foreign cars are taxed too.

      • I’d shy away from using taxation as a market incentive/disincentive. Rather than the usual arguments against taxation, think of it this way: a tax disincentive is a conflict of interest because the government wants more tax revenue but supposedly wants you to stop using that market item. The proper tool for market disincentives is regulation, not taxation (e.g., limit importation, production, sales, or sales).

        • extorres: But in this case it would benefit the State, because if it applies a tax based on fuel consumption, the less fuel people use in Venezuela, the more it can sell abroad at international prices. Don’t get me wrong, I prefer no such tax and instead have a fair price for fuel. Let everyone decide what car to buy. It wasn’t too long ago when fuel economy kinda mattered to Venezuelans, and some bought cars accordingly.

          • It’s just the left hand (SENIAT) wanting the opposite of what the right hand (PDVSA) wants, so it’s still a conflict of interests.

            If you look further at what you point, it’s just one more reason for the government staying out of the oil industry: suppliers of oil should want demand to drive prices up, but buyers should want supply and alternatives to drive prices down. Here we have a psychotic government playing both parts, supposedly representing us buyers, while representing the sellers as well.

      • Interesting alternative, causetoujours. It would have to be a tax based on fuel consumption or CO2 emissions, rather than the traditional engine-size approach still used in Europe (although it’s going towards CO2-based). Engine-size, or vehicle-type (SUV, hybrid, etc) approach is technologically unfair because you could have the case of a big car that is in a lower tax bracket because it’s a hybrid, even though a smaller, conventional car might use less fuel.

        Having said all that, the problem with it is that such a scheme requires enforcement, and that is something traditionally not done very well in Venezuela, unless, of course, it only applies to purchase or registration tax of new vehicles.

        • My idea: implement a tax that goes straight into infrastructure and publish monthly financial statements of the fund. Keep the price of gas the same, but have the consumer pay the price of gas plus the infrastructure tax. That way, the government can always say they haven’t “raised the price of has,” it’s simply taxing the purchase of gas.

          1 barrel of oil = 159 liters. If you tax it at, say BsF 0,1 per liter, that’s about BsF 11.300.000 per day in tax revenues (700,000 barrels of gasoline per day times 159 liters per barrel times 0,1). Imagine the amount of roads you could get fixed, amount of highways you could build, with 11 million Bs per day. It’s BsF 4.2 billion per year, almost US$1 billion at official exchange rates.

          • Yes, you pay at the pump, only it comes separate from the price of gas. Kind of like the IVA.

          • OK,makes sense. The thing is how you prevent Chavistas from causing another Caracazo nonetheless. Think buses. Most people travel by bus. It would be interesting to find out firstly what the real price for transportation should be. Do you have a clue how much bus fares are in Colombia, Brazil, Chile?

          • Of course I have a clue about Chile, I use the buses all the time. The bus price here depends on the time of day, but normally it will set you back about 600 pesos, roughly US$ 1.20.

          • Bueno, as Setty notes, Venezuelan retail gasoline *is* taxed!

            From the Ley Orgánica de Hidrocarburos:

            3. Impuesto de Consumo General. Por cada litro de producto derivado de los hidrocarburos vendido en el mercado interno entre el treinta y cincuenta por ciento (30% y 50%) del precio pagado por el consumidor final, cuya alícuota entre ambos límites será fijada anualmente en la Ley de Presupuesto. Este impuesto a ser pagado por el consumidor final será retenido en la fuente de suministro para ser enterado mensualmente al Fisco Nacional.

            It’s just taxed on the basis of an insanely low base. So to make Juan’s proposal make sense we’d have to jack up the tax rate on gas to some loopy number. And you’d be continuing the fiction through some convoluted smoke and mirrors.

            My view is simpler. Basta de paja. No more smoke and mirrors. No more bullshit. Start by printing on every gasoline receipt, in BIG FONT, the Subsidy calculated on the Basis of the international Opportunity Cost.

            Precio Internacional: Bs. 200
            Subsidio: 180
            Ud. Paga: Bs.20

            Do that for six months, or a year, while you prepare the replacement mechanism: a proper CCT.

            Then slowly bring the price of gas up to international standards, timing each increase to coincide with implementation of Conditional Cash Transfer programs aimed at school enrollment.

          • When CAP tried to raise the gas prices I remembering hearing things like “we are an oil producer country, why shall we pay international prices for gas?”
            Not too sure the formula would work that easily. “Cheap” gas is kind of a cultural…”pride”.
            Maybe that’s one of the reasons why everybody in power chickens out at this issue?

          • Good thing. Still, as Carolina said, people are so thick on this they think petrol just flows automatically and at no cost from the Earth to the petrol stations (never mind some of us did get some information on oil processing in bachillerato).
            Perhaps some one liner needs to be expressed about this simple fact…sigh

          • People pivot within 15 seconds from a cultural “pride” in cheap gas to complaining about traffic jams!

            Fuck ’em. Seriously. Fuck ’em. If people have to be dragged kicking and screaming from catastrophically self-destructive policies that foreclose any possibility of having a decent society, let the dragging begin!

            At any rate, by the time the CCTs are in place, the notion of returning from THAT system to one that rewards people for causing traffic will seem exactly as demential as it actually is.

          • Yeah. Fuck’em. Seriously. Let’s have another Caracazo…
            I understand it’s frustrating but that cannot be the way. It has to be explained, at a slow pace and offering reliable alternatives for transportation.

          • There’s not going to be another Caracazo when every kid in every poor household in the country turns up from school once a month with a Bs.600 check that says “paid for with the gas price hike.” Do that and the people who’ll be telling the complainers to go fuck themselves is every barrio mom in the country.

          • The little reply button doesn’t show on the ‘fuck em’ comments by kiko below. I think that to say ‘fuck em’ here is akin to saying ‘I am done thinking about this shit, I got the right answer and y’all better listen to me!’. Economic expertize seldom worries itself with issues of power and resistance.

            What I find worryingly absent from this thread of comments is an effort to understand what is more socially valuable between the modification of an economic reality (from subsidized petrol to non-subsidized petrol) or the modification of social behavior (the kind that would stem from the understanding of the reasons why real gas prices –which don’t have to be international– is better for all of us). The latter is much much harder to obtain but guarantees the success of attempts at achieving the former.

            Assuming that people think rationally about the proportion in which subsidized-gas-benefits are distributed is a myopic way of looking at the issue. Lack of trust in government institutions to use the funds of a real gas price is a factor, the time differential between my paying a higher bus ticket and the reception of a benefit tied to this is another. Not trying to understand this factors before shocking the system into change is irresponsible.

            As an example, the current state of disrepair at the metro de caracas is a reality but it took years of mismanagement for social behavior to change in a space that used to be sacred. Something similar to the creation of that sentiment should be the aim of public policy before we can talk about increasing gas prices if you don’t want the shit to hit the fan.

            My enduring impression is that this issue is tricky beyond what many realize hare and beyond my own understanding of it.

          • Sorry Challenger, but if I see somebody repeatedly smashing his own balls with a hammer, I don’t have any problem stepping in and grabbing that hammer away from him. I don’t need to understand the deep psychodynamic factors underpinning his decision to smash his balls with a hammer again and again to know this is deeply self-destructive behaviour. I can see with my own eyes that it is so. And by the time you’re half-way through your jarabe de lengua about understanding the deep reasons for why people are so committed to keeping smashing their balls with a hammer I’ve lost interest.

            It’s incredibly self-destructive. On a whole variety of different levels. It has to stop. A political movement that doesn’t have the courage of its convictions to put an end to behaviour on this scale of self-destructiveness isn’t worth trusting with the running of the state.

          • And that lack of understanding is why social policies fail again and again. It’s one of the reasons why ‘development’ is an ever shifting goal alla horse and the carrot.

            A problem that has become endemic and that has persisted for more decades than I have been alive may, just may, have deeper sources than your ‘people are just masochistic’ reasoning.

            My point in the end is that by rendering the problem technical (that phrase is not mine) we fail to understand its reasons. Trying to change something you don’t understand is I would argue irresponsible. People are not guinea pigs mate.

            Now, please note that I do understand the reasons why it is folly to have gas subsidized at the levels that it is in Venezuela and that I would support changing this. Also understand that you and I or your other two readers 😉 have a slightly different understanding of life in Venezuela than the majority. Explaining things in their terms is a worthwhile task.

            Finally, and at the risk of having made this post too long and having lost your attention three paragraphs ago, when I see a bunch of people hitting their balls with a hammer I don’t take the hammer away and congratulate myself on having solved the problem. What if they get their hands on another hammer?????

  11. I wrote about this in my blog on Ideas about Venezuela. Basically, I propose a system whereby everyone can check out how many litres of petrol someone else is requesting. You would be able to see online what portion is consumed in municipios in Táchira or in Barinas, etc. The technology is there and it doesn’t need to be more breach of privacy than what we already have on the CNE. I can check out the date of birth, cédula and voting centre for every Venezuelan voter on Earth.
    Transparency is the key word.

    But again: anything should be very publicly explained beforehand.

  12. Reducing the IVA, and increasing gasoline prices at the same time, as to reduce the distortional properties of the IVA, and will at the same time increase our energy efficciency + better trade balance + less pollution while keeping our budget balance. If the changes are done gradually enough lets say 0.2% of %gdp a year we will not only avoid a caracazo. which is certainly better than proposing bigger government, which is already very inefficient never mind corruptible.

  13. The way to charge for gasoline and hit the rich in their pockets is to have a sliding scale of price according to the book value of the car. The gasoline attendant would scan the vehicle’s VIN number and the price would be adjusted to the value of the car. I think it could work because people like driving nice cars. Who would want to drive an old banger just to save a bit on fuel?

    Otherwise I agree with paying out the oil income directly to the people in equal shares. Then the price of fuel won’t matter as everyone will be able to afford the real cost.

  14. Yesterday, Pedro Palma had a short interview in “El Mundo” regarding a possible gas price hike. I thought, perhaps unfairly, that he must have been reading CC the day before. Come to think of it, it’s a lovely place to get your wonkish side rolling.

  15. Wow, I like where we’re going with this discussion. We’ve even been able to get Quico pissed off 🙂 !! I think it would be interesting to have a post devoted to “different alternatives to the gasoline price problem in Venezuela”. I can understand the merits of the Fuck’em alternative because it’s like getting a vaccination: better do it quick or it will hurt more. However, I’m not totally convinced people would accept it passively. I’d like to think they will, but It’s been too many years – almost a generation – of ultra cheap gasoline. It won’t be easy to change people’s mentality. The only other realistic alternative that I can think of is a kind of gasoline CADIVI: a rationing card to buy a limited amount of cheap fuel. If you need more, you’ll have to buy it at the non-subsidized price. But imagine the amount of corruption that such a system would generate. It’s a hard problem, indeed.


Please enter your comment!
Please enter your name here