Thursday, January 10, 2008

China Freezes Energy Prices; Bans Plastic Bags

People don't like inflation? Oh, okay, we'll just freeze the price of gasoline.

Someone has to pay that bill eventually, no?

By banning plastic bags, China will save an entire week's worth of oil consumption, or 37 million barrels in one year.

Interesting...

2 comments:

Adrian said...

In a communist country where oil is supplied by the state, freezing the price of gas isn't a bad idea. In any country where the supply of an essential resource is fixed and cannot increase if price increases, then fixing the price is a reasonable response.

And just how practical is it really to ban plastic bags? How will trash disposal work, pray tell? I'm sure we can work it out eventually, but it's not as simple as snapping our fingers and moving to paper bags, this affects other areas of life.

KC Equity Trader said...

It's a government subsidy. The gas prices that are "paid" will be from whatever is the price on the open market. The government will keep price fixed and pay the difference.