use less Hydrocarbon petrol can heal the world

a tax hike closer to levels seen in Europe is needed to shift the U.S. economy to more fuel-efficient cars, ease dependence on foreign oil and pay for better public transit.

The federal gasoline tax is 18.4 cents, unchanged for about 10 years. State taxes can add up to another 20-30 cents, still a small fraction of the national average price for regular gasoline of $2.80 recorded by the nationwide Lundberg survey on Friday.

That is close to the inflation-adjusted high of $3.12 a gallon in 1981, but way too low according to syndicated New York Times columnist Thomas Friedman, who urges a gradual increase in the federal gasoline tax by $2.

The revenue would "fund tax breaks for Americans to convert their cars to hybrid technology or biofuels, fund a Manhattan Project to develop alternatives for energy independence, and subsidize mass-transit systems for our major cities," he wrote recently.

The idea has a few surprising supporters in the auto industry, such as Mike Jackson, chief executive of AutoNation Inc. , the largest U.S. auto dealer.

At the Reuters Autos Summit in Detroit last week, he said a tax hike was "long overdue."

"Just raise it 10 cents a year (and leave it) open-ended. You raise the demand for fuel efficiency and you justify the cost of the technology," he said, referring to hybrid vehicles.

Tim Leuliette, chief executive of auto parts maker Metaldyne Corp. in Plymouth, Michigan, has proposed a similar increase to usher in the era of hydrogen-powered cars.

He wants a 50-cent tax hike phased in between 2008 and 2012 to fund research, build infrastructure and pay for incentives to get the public to buy the new cars.

Leuliette and Jim Press, who heads the U.S. arm of Toyota Motor Corp. , will travel to Washington, D.C., next month to push energy independence as a major issue in 2008 elections.

"Do you know what the real cost of gas is?" Press asked at the Reuters Summit last week. "You need to add to that $3 a gallon the cost of a war in Iraq, the cost of losing American soldiers to keep a pipeline of oil going."

NO SUPPORT IN CONGRESS

Republican congressional leaders have flatly rejected any talk of raising the federal gasoline tax to curb consumption. One aide to a senior Republican senator said "the idea is not a good one and not worth dignifying with a comment."

"Republicans are against it and Democrats are against it -- that doesn't leave much to work with," said Rep. Ed Markey, Democrat from Massachusetts.

Markey recently introduced a bipartisan bill that would require automakers to boost the fuel efficiency of new vehicles to an average of 33 miles per gallon over the coming decade from the current 25 mpg.

"It is possible to achieve the goal of fuel efficiency without increasing gasoline taxes," he said, adding that his legislation would save an estimated 2.6 million barrels of oil per day (bpd) by 2025.

The United States consumes nearly 21 million bpd, more than half of it imported. Fuel economy peaked in 1986 and has gone backward ever since as Americans bought more trucks and SUVs.

A previous attempt to require better mileage for new vehicles was defeated in the Senate this summer when it passed a $14.5 billion energy bill that aimed to boost energy production and gave extensive tax breaks and subsidies to the industry.

EUROPEAN TAXES

In Europe, taxes make up an average of 60 percent of the gasoline price, which can reach $7 a gallon in the Netherlands.

High prices force European to drive less, buy more efficient cars and use more public transportation. European motorists drive half the miles each year that Americans do on average, the International Energy Agency estimates.

In London, which has a congestion charge to discourage car travel, about 87 percent of people commute by public transit.