Even China is raising gas prices. Actually, they’re not raising prices above the market price. They are only raising prices closer towards the market prices.
Ok, first all, how come no country is a real capitalist country, not even the communists? China had fixed (and thus subsidized) the price of gas back on November 1st, and kept it there (where-ever there is) ever since. But a funny thing happened, their own energy companies threatened to go bankrupt, their stocks plunging. So China’s newly wealthy class took a beating in their accumulated wealth. And last week China decided to adjust the prices of gas and diesel upwards 18 percent, which for gas means its now the equivalent of $3.58 a gallon. Doesn’t sound too bad compared to here, but an 18 percent jump may mean that the Chinese will drive a bit less. At least no more Sunday drives in the park. And that may mean further downward pressure on demand, possibly causing the price to drop.
By the way, the NYTimes noted that if demands does fall in China, it will lend support to the idea that economists here are advancing. If we tax gas more, much, much more, the core price will very likely fall, as we use less. The less we use, the more that remains for our grand kids ( the great grand kids will have to be on their own, the ungrateful snots).