The good news: invading Iraq has had the desired effect of lowering gas prices. The bad news: prices have only dropped in Iraq. I while paid $31 to gas up my car yesterday, at $1.90/gallon, it would have cost me just $0.81 in Iraq. Why? Iraqis only pay $0.05/gallon. That’s after we, the Americans, pay $1.50 for that fuel in neighboring countries, pay multinational contractors to operate a fleet of 4,200 tankers to truck it into Iraq, where it is resold at a tremendous loss. Assuming (very optimistically) that it costs just $0.50 for all transportation and administrative costs to handle that Iraqi oil-distribution infrastructure, remember that you’re not paying $1.90/gallon for gasoline — you’re paying $3.85.
Happy motoring.