The price of gasoline is an emotive issue for the American public. The recent rise in gasoline prices over the past two years has alarmed the average American. Gasoline prices have tripled in just one year. The Great American Dream is fuelled by gasoline. The average American has always been used to cheap gasoline historically except for a few years in the 1970s. A hike in price of gasoline would make a severe dent in the income budget of Americans. Gasoline is at the very foundation of America’s industrial, technological and military complex. The entire American economy would come to a standstill. The reduction of supply with the war in Iraq and major demand for energy by China and India has caused the price hike. OPEC cartel has once again become powerful. Venezuela and Iran, both, are hostile to the U.S., and are members of this cartel. There has been a debate going on whether a gasoline tax should be imposed or not. There has also been an argument for putting a price cap on gasoline. The consumption of gasoline is scheduled to run out in 30 years time. There is also the major externality of pollution from consumption of gasoline and subsequently global warming. Hence, there has also been a discussion about raising fuel economy standards such that less gasoline is consumed per mile and thereby less exhaust.