If successful, the Tata Nano will likely push up gas prices

Feb 5th 2008 at 2:19PM

I'm not quite sure why I put "likely" in the headline to this post. I can't think of any scenario where the ultra-cheap Tata Nano sells millions of units in India and China and other "developing" countries but doesn't have an effect on gas prices in the rest of the world. I mean, if a million more people need to buy gas (or more gas, if they're used to scooters) to get around, that's a lot less gas that's available to the people who use it today, no?

This possibility is the subject of a CNN story that quotes oil analyst Peter Beutel as saying that, "We'll get into a situation where we'll have to compete with them for gasoline, $4, $5 a gallon, who knows how high we could go." Beutel's estimate is that $4 or $5 gallons of gasoline could come to the U.S. much sooner than 2015. Considering that the 50+mpg Nano is kind of a gateway car and that larger, thirstier vehicles will be offered to the people who outgrow the Nano, then what?