Americans who need to stay socially away from the COVID-19 pandemic now have another explanation for why to think twice before going out to get gas.
Several states have imposed higher fuel taxes in recent months to compensate for the sudden shortage of road repair revenues. As Americans drive less during the pandemic, partly due to social distance and remote paint arrangements, demand for fuel has declined. points that cause tax increases as lawmakers seek to restrict the effect of declining revenue on road repair budgets.
Supporters say the increases, the maximum of which were triggered by existing laws, are necessary to keep transport infrastructure in smart condition.
Critics say fuel tax increases are poorly programmed and will hurt low-income drivers at a time when they are more likely to face unemployment, reduced hours, or pay cuts.
Lately, gasoline demand is 15% below normal, according to oil analysts.
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The good news for motorists is that lately they are saving on the supplier because the COVID-19 pandemic has slowed the economy, reducing demand and the value of oil and gas, which are obtained from crude oil. a gallon on Tuesday, 49 cents less than last year, according to AAA.
“Gas costs are low, presenting a wonderful opportunity for politicians with very bleak (income) numbers,” said Patrick DeHaan, GasBuddy’s head of oil research.
New York-based Adam Librot, who refuels his SUV as he crosses the river to buy groceries in New Jersey, is disappointed by the state’s plan to increase its fuel tax from 9. 3 cents per gallon to nearly 51 cents, without adding federal tax. .
“This is a number of obstacles to going to New Jersey,” he said.
But Librot said he doesn’t expect many locals to realize the tax increase, as other people blame oil companies for fuel increases.
“It’s integrated into the price,” Librot said of fuel tax. “It’s hidden from view, so unless you notice when the multitude of pieces comes out, it will disappear from the headlines and you won’t feel the tax itself. “
States have an average of 36. 4 cents consistent with gallons in taxes and gasoline rates as of July 1, according to the American Petroleum Institute. The federal tax of 18. 4 cents, in addition to government taxes, has replaced since 1993.
Recent increases have occurred in Virginia (5 cents), Nebraska (3. 9 cents), California (3. 2 cents), South Carolina (2 cents) and Illinois (0. 7 cents). The increases that will occur on October 1 will come with New Jersey and Alabama (2 cents).
Oil value data analyst Tom Kloza predicted that additional increases will continue, as gas demand remains around 85% of overall demand for the foreseeable future.
“There will be a ton, ” said Kloza. ” The majority will come after the election, (with effect) on January 1 or July 1 of next year.
The challenge is that while fuel tax increases are likely to finance tens or loads of millions of dollars in road repairs, they would possibly not compensate for a projected profit loss of $5 billion due to declining fuel demand, DeHaan said.
“It’s hard to quantify it as a blessing because many of those states have been decimated,” he said. “It’s like putting a bandage in an open bullet hole in the middle of your chest. “
However, legislators will have to take into account that the economic burden of fuel tax increases the pandemic, said Ulrik C. Boesen, senior political analyst at the Tax Foundation, a Washington-based group of experts.
“That said, fuel taxes pay for our roads, and it’s general for other people who use the roads to pay for the roads,” Boesen said in an email. “But even though 36 states have higher fuel taxes over the past decade lately, there are very few states that collect enough cash from transportation taxes for awning transportation expenses.
As a result, lawmakers turn to other sources, such as general fund revenue, to help pay for road repairs.
“If fuel taxes don’t generate enough revenue, taxpayers simply fund the roads through other taxes,” Mr. Boesen.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.