Acton Institute Powerblog

Gas Rationing Hurts the Poor

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It’s one thing to have a great government policy put in place with intention of seeking justice. It’s quite another to continue to promote policies whose unintended consequences hurt the most vulnerable populations.

Even though Iraq has the world’s third largest oil reserves, the lack of a reliable infrastructure, sabotage, and government-imposed price controls (oil is $.05 a gallon, a holdover from the Saddam Hussein regime) make gas for law-abiding citizens hard to come by.

These price controls result in forced government rationing. Now new regulations allow driving only on every other day, depending on your license plate number. Last Tuesday was the first day of the restrictions, and only cars ending with odd numbers were allowed on the streets of Baghdad.

Reuters reports on the effect that these policies are having on Iraq’s working classes, such as they are. Taxi driver Amir al-Hameeri, who did not take his car out on Tuesday, fearful of a fine equivalent to $20 if his even-numbered licence plate was spotted.

“It’s a ruthless decision against the poor,” he grumbled. “How can I feed my family now?”

This is a prime example of how policies which may have the best of intentions (affordable fuel for all Iraqis) that ignore the realities of the marketplace have adverse consequences. And as always, it is the poor among us who suffer the most.

Here’s an NPR story with more on how motorists are “beating the system” through black markets and other means.

HT: John Powers

Jordan J. Ballor Jordan J. Ballor (Dr. theol., University of Zurich; Ph.D., Calvin Theological Seminary) is a senior research fellow and director of publishing at the Acton Institute for the Study of Religion & Liberty, where he also serves as executive editor the Journal of Markets & Morality. He is author of Get Your Hands Dirty: Essays on Christian Social Thought (and Action) (Wipf & Stock, 2013), Covenant, Causality, and Law: A Study in the Theology of Wolfgang Musculus (Vandenhoeck & Ruprecht, 2012) and Ecumenical Babel: Confusing Economic Ideology and the Church's Social Witness (Christian's Library Press, 2010), as well as editor of numerous works, including Abraham Kuyper Collected Works in Public Theology. Jordan is also associate director of the Junius Institute for Digital Reformation Research at Calvin Theological Seminary. He has authored articles in academic publications such as The Journal of Religion, Scottish Journal of Theology, Reformation & Renaissance Review, and Journal of Scholarly Publishing, and has written popular pieces for newspapers including the Detroit News, Orange County Register, and The Atlanta Journal-Constitution. In 2006, Jordan was profiled in the book, The Relevant Nation: 50 Activists, Artists And Innovators Who Are Changing The World Through Faith. Jordan's scholarly interests include Reformation studies, church-state relations, theological anthropology, social ethics, theology and economics, and research methodology. Jordan is a member of the Christian Reformed Church in North America (CRCNA), and he resides in Jenison, Michigan with his wife and three children.

Comments

  • This is true. Just as in the UK the rising price of petrol affects the poor too!

  • As a freelance writer for the taxi industry, this situation is unfortunate. The taxi industry worldwide is suffering from the increase in fuel prices, and many drivers are seeking alternative employment as a result. Having to drive only every other day will certainly make things worse for the industry in Iraq.

    Robin (Taxigirl) http://www.taxidriver.ca

  • T.R. Elliott

    In principle, gas rationing can be structured in a way that doesn’t hurt the poor. The government allocates gas credits. These are distributed to all drivers. Drivers are then allowed to either use them to purchase fuel or to sell them on the open market. Rationing takes place one way or another. Either the price goes up, and rationing takes place through the pricing mechanism (squeezing out those who cannot afford to purchase fuel). Or one limits demand through outright rationing, as described above through the use of credits.

    Those who oppose this scheme do not understand the nature of property rights and the whole concept of trading polution credits.

    It makes economic sense and also ensure reduces economic disruption when fuel supplies are low.

  • Scott

    I’m pretty sure I understand the concept of property rights, that being said I don’t understand how distributing ration credits to drivers has anything to do with property rights and the whole concept of trading pollution credits. Drivers (or the public) don’t OWN the gas, the gas companies do. If you distribute credits to drivers (why just drivers, shouldn’t non-drivers receive the same ration credit?) and allow them to sell them in the open market you’re operating on the assumption that they have a right to a certain amount of gas.