I agree, gas should be even more expensive, but that's assuming that the extra money would be used to pay for externalities of burning gasoline, and that we got the money back as tax cuts elsewhere. That would never happen. The money would go into someone's pocket and you'd wind up paying in BOTH places.
So for now the people burning gasoline (I'm one of them, we're not at all car free) get subsidies to pay for all of the many ways in which the oil society costs us, and even someone who's car free is forced to pay most of them.