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One of the biggest things to drive up American gas prices in the coming years is about to happen on the other side of the world: India's Tata Motors is about to introduce the world's cheapest car ($2,500), the Nano, to a potentially gigantic market in India.
Your first reaction may be, "Hey, who cares if somebody builds a cheap car in India. Nobody there can afford to buy it. So what?" Let me bring you up to speed, my friend, as things have changed a lot since the making of "Gandhi".
First and foremost, sometime in the next ten to twenty years India is expected to become the world's most populous country, passing China. Right now, India stands right around 1.1 billion people - a sixth of humanity. Second, while a large percentage of Indians remain poverty stricken, their middle class is expanding on a tidal wave of economic prosperity. Economists predict that India could continue its meteoric economic growth for the next twenty to thirty years. The result in terms of people is that India's middle class, which is now roughly fifty million people, will skyrocket to anywhere from two-hundred to five-hundred million, depending on what you read.
Third, when people make more money and move into the middle and wealthy classes, they can afford to buy more and nicer things. Everything from refrigerators to cars. Especially cars! What greater sign of success is there to the average person in the middle class in any country, but your own wheels? Now, imagine what's going to happen when you make a $2,500 car available to tens - and eventually hundreds - of millions of people who want to live the good life in what's traditionally been a poor country?
They're going to want to buy it, and they'll be able to! And, of course, if you have a car powered by a gasoline engine, you need gasoline to run it. Oh, and did I mention that India currently imports the majority of their oil, and is looking to import more? And that they're building the world's biggest refining facility?
And where do you think that oil is going to come from? Answer: the same markets that we (and the Chinese) are in. The basic laws of supply and demand are fully in play, my friend: from what I've read, we're not going to be able to access enough new oil supplies to make up for the depletion of existing reserves, let alone keep up with the insatiable demand that India and China will have.
Granted, the Nano car by itself is not going to change the world, but India's rapidly growing economy needs energy to sustain itself, and we - and the Chinese - are in direct competition for most of the same resources. As a result, oil prices are going to continue to skyrocket for the foreseeable future. What to do, you ask? GET INVOLVED! There are personal things you can do like carpooling to help, but the long term solution requires the government to change its policies on oil and alternative energy: we need to stop subsidizing fossile fuels and develop a heavy financial incentive program for sustainable energy. Contact your legislature and your congressional representatives to pressure them to move ahead on alternative energy sources before you wind up paying $10 or more per gallon. Don't laugh: it can happen, and probably within the next couple of years...
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