Evaporating cap on Pa. gasoline taxes to offset drops at pump
If gasoline prices continue to hover where they are, Ron Stover might get rid of his Dodge Durango.
These days, the dark silver sport utility vehicle with its V8 engine costs $85 to fill.
“I haven’t filled it up in I don’t know how long,” said Stover, 39, of the North Side.
Pennsylvania drivers pay less for a gallon of gas than they did a year ago, but planned changes to a state tax could increase the cost down the road, even as experts predict prices nationwide might continue to drop.
With a statewide average of $3.15, per-gallon gas prices in Pennsylvania are about 20 cents lower than they were at this time last year, according to analysts at GasBuddy.com. The latest decline in fuel prices is largely because of seasonal trends, the cushioning boom of domestic energy production and drops in the per-barrel cost of crude oil, senior petroleum analyst Gregg Laskoski said.
“When you see crude oil prices moving down, that typically means wholesale gasoline prices are moving lower across the country,” Laskoski said. “It bodes well for consumers.”
For frequent drivers, the change is noticeable.
Andrea McKinley, 31, of Plum drives up to 50 miles a day across Allegheny County for her work as a mental health service coordinator.
“The cheaper the price, the more in my pocket,” she said.
Laskoski said the national average could dip below $3 a gallon in the next two years. But in Pennsylvania, which is among the states with high gasoline taxes, a plan to gradually uncap a wholesale tax means prices likely will fluctuate.
In November, the Legislature passed a $2.3 billion package to repair state roads and bridges. The bill funded improvements largely through changing the gas tax at the wholesale level, a change that oil companies could pass on to consumers. As part of uncapping the wholesale tax, the state repealed a flat tax at the pump.
State Department of Revenue figures show gasoline taxes jumped from 31.2 cents per gallon in 2013 to 40.7 cents per gallon this year. Revenue officials have not published the per-gallon tax increase for 2015, but it likely will be similar, spokeswoman Elizabeth Brassell said.
Whatever the wholesale increase, consumers will absorb it — as they did with this year’s 9.5-cent increase, said Donald Bowers, manager of petroleum and transportation for distributor Superior Petroleum Co. in Ross.
Despite PennDOT claims that the entire tax wouldn’t be passed along, Bowers said it always is.
Today’s price for a gallon of gas would be 9.5 cents lower if the tax had not increased, he said.
“It goes up by what the taxes are. Somebody’s got to pay, and it can’t be us because we don’t make enough. We don’t make what the government makes in taxes (per gallon),” Bowers said. “The reason the prices are (lower) this year is because there’s a glut of oil in the market.”
Bowers said the amount of gasoline sold in Pennsylvania is down compared with last year; he blames people traveling across state lines to fill up. Still, he considers the gasoline tax “one of the fairest taxes because everyone pays it.”
At the pump, consumers don’t see what triggers an increase or decrease in prices. But when the price of gas is low, Andre Samuel doesn’t mind if the state adds taxes to fix roads and bridges.
“The state has to bring in revenue somehow, some way. It’s when the taxes and the price of gas start increasing, like during the summer, that’s when I have an issue because it’s more money out of my pocket,” said Samuel, 43, of Upper St. Clair. “I’m originally from D.C., so I’m used to taxes.”
When lawmakers passed the transportation bill, Pennsylvania led the nation in the number of structurally deficient bridges with more than 4,000, PennDOT has said. The state has started construction on 1,600 miles of roads and 83 bridges as part of the legislation, PennDOT spokesman Rich Kirkpatrick said.
“Because of Act 89, Pennsylvania is doing more than $800 million more in road and bridge work this year alone,” Kirkpatrick said.
But Rich Ammer, 53, of Dormont dislikes the tax increase. He said he spends about $50 a day on gasoline because of his job.
“I don’t think they’re fixing anything. They have everything tore up, but nothing is fixed,” Ammer said. “I think the roads are as bad as they’ve ever been.”