How to boost fuel efficiency? Raise taxes, executives say

By Scott Malone

DETROIT (Reuters) - There's a simple way to get Americans to drive fuel-efficient cars, according to auto executives, but they are not going to like it -- sharply hike the gas tax.

While politically unpalatable, gasoline that costs at least $4 a gallon would have a far greater effect on American fuel usage than Washington's $25 billion loan program meant to spark investment in new technologies, executives told the Reuters Autos Summit in Detroit.

Consumer demand for fuel-efficient cars like Toyota Motor Corp's Prius and Ford Motor Co's Escape hybrid surged last summer as gasoline prices soared above $4 a gallon.

But with the pressure off -- the average U.S. retail gas price was $2.66 a gallon at the end of October, according to the benchmark Lundberg survey -- Americans are once again buying fuel-hungry sport utility vehicles and other large cars.

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