Gas Tax

By early 2004, with political instability in Iraq and tensions in the Middle East, crude oil prices skyrocketed in the international market. Prices increased by 33% between Dec 2003 and Feb 2004. Historically any sharp increase in crude oil prices hs pushed the U.S. economy into recession.

Analyst warned that any programme to reduce oil consumption must be a long term affair as a drastic or abrupt drop in demand could even be counterproductive. As even small change in capacity or demand 'can bring big swings in prices'. The economic turmoil in Asia in the mid 1990s reduced demand only by about 1.5 mbpd, but it caused oil prices to plunge to nearly $10 a barrel.