Money down the pipeline

The price paid for gasoline by the end user does not reflect the actual social cost of the commodity. Various stages of the production process have been subsidized by the government, which in effect shifts the cost onto the public. In the case of petroleum-based gasoline, the government implements these subsidies by reducing taxes on the corporations that refine and supply the gasoline, by charging a lower sales tax than on other goods, and by directly funding different programs that benefit the oil companies. This arrangement is in fact a de facto investment in a oil-based fuels, when public funds should be invested in implementing alternative transportation solutions.