#Gasoline

Gasoline prices are falling in Japan, not only due to lower crude oil prices, “but also because the widespread popularity of fuel-efficient vehicles has lowered demand for gasoline,” The Nikkei [sub].

The Tokyo paper predicts …

Since 1998 Honda has been quietly producing one of the cleanest vehicles in America. In 2001 the EPA called its engine “the cleanest burning internal combustion engine in the world.” No, it’s not a hybrid, it’s Honda’s Civic Natural Gas (formerly known as the Civic GX). Until now, the Civic Natural Gas has only been available for retail sale in a handful of states like California and New York. For 2012, Honda expanded sales to 37 states and lent us one for a week.

The Economist has put together the above chart showing global gas prices as of February 2012, as well as how fast they’ve risen in the past 12 months. Even with gas approaching $4 overall, we’re not doing too badly compared to the rest of the world.

Edmunds’ always dead-on Autoobserver brings us the shocking news that Americans don’t drive enough. That, or they use the wrong cars. Whatever it may be, Americans are about to lose the carefully cultivated title “world’s biggest gasoline oinkers.” Gasoline consumption hit rock bottom in July!

Says Edmunds:

“U.S. demand for gasoline last month was at its lowest for July in a decade as the slower-than-expected economic recovery appeared to cause many people to either cut back on driving or buy more fuel-efficient cars. U.S. refinery gasoline production in July dropped 2.3 percent from a year earlier, marking the first year-over-year drop for 2011, the American Petroleum Institute (API) said in a report released late last week.”

There are multiple reasons for people taking a pass on gas. Let’s investigate.

General Motors CEO Dan Akerson set off something of a firestorm a few weeks ago, when he said, in response to a question about forthcoming CAFE increases:

You know what I’d rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas.

Predictably, populists and economic alarmists of all stripes took great umbrage at Akerson’s candor, questioning his leadership of GM as well as his perspective on the shaky US economy. But Akerson is not alone in his support of some form of gas-tax increase. Bob Lutz and Tom Friedman (an odd couple right there, if ever there was one) agree with him. Edmunds CEO Jeremy Anwyl defended Akerson and even suggested a $2/gallon tax earlier this year. Bill Ford and AutoNation’s Mike Jackson are of the same mind as now-retired Republican Senator George Voinovich on the issue. And yet, inside the Beltway, the subject tends to draw a chuckle and a roll of the eyes. Everyone wants it, but nobody wants it.

Rising prices at the pump make people do dumb things. Some buy a new car to save at all costs. Not only will they never recoup the cost of the new car, the tsunami in Japan turned fuel efficient Japanese cars into everything else than a bargain. Others do something particularly stupid: They drive their car until it runs out of gas.