Japanese politicians dither and gas prices fall!

On April 1, 2008, more than 30 years after a "temporary" gas tax increase was imposed, the tax fell from about 50 yen per liter to about 25 yen per liter. This was not planned. It happened because the DPJ who control the upper house of parliament were able to stall legislation to extend the tax. In about a month this will all be sorted out, as the lower house will be able to override the upper house. But in the meantime, average prices have dropped from about 150 yen per liter to about 125 yen per liter. Now that's still about $5/gallon but finally the Japanese consumer has something to cheer! 

Of course, all 47 prefectural governors deplore this sudden drop. Why? Because the prefectures get a big chunk of pork-barrel funding from this tax. It's not for nothing that several members of government are called the "Road Tribe"! 

Of course there are doom and gloom scenarios of several 100 billion yen in lost revenue. What nobody seems to have factored in is that consumers may actually buy more gas this month, mitigating the revenue shortfall at least a bit. 

And then how many more roads does Japan really need?

But don't forget: It's not about the roads. It's about who controls the flow of money!