As Virginians hit the road for holiday, state gas taxes to rise Friday | Govt-and-politics

As Virginians prepare to hit the road for the July 4th holiday weekend, state gas taxes are going up, along with a fee to replenish a fund for cleaning up leaking underground petroleum storage tanks.

Under an index to offset inflation, state and regional motor fuels taxes will increase 7% on Friday, which translates to 2.34 cents per gallon, applied at the wholesale level to gasoline and diesel fuel. The fee for underground storage tanks will rise by 0.04 cent per gallon, based on a state law carried out by Gov. Glenn Youngkin’s administration to restore the depleted state fund.

Motorists won’t necessarily see the retail price change by 2.7 cents per gallon at the pump, as crude oil markets continue to take consumers on a roller coaster ride. The average price of gasoline in Virginia was $ 4.68 per gallon on Wednesday, down by 11 cents a gallon from a week earlier but 23 cents a gallon higher than a month ago.

“In this time of wild swings, it’s hard to say the 2.7 cents is going to make a difference one way or the other,” said Michael O’Conner, president of the Virginia Petroleum & Convenience Marketers Association. “It really depends on what the cost of crude oil does. “

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The inflation-driven increase will take effect at the wholesale level on the same day that a new two-year state budget will become law –without a three-month fuel tax holiday sought by Youngkin, who also wanted to cap the inflation index at 2 % a year.

Senate Democrats, with help from one Republican, rejected the governor’s proposed holiday twice, as well as his earlier effort to roll back the most recent 5-cent-per-gallon increase in the state tax retroactively for 12 months. (President Joe Biden recently) urged Congress to pause the federal gas tax for three months and urged states to suspend their own gas taxes.)

“The governor sent three separate gas tax suspension proposals to ease the pain at the pump for Virginians and Senate Democrats blocked them,” said Macaulay Porter, a spokesperson for Youngkin.

Now, with a 7% gas tax increase and 40-year high inflation, Virginians are suffering due to Senate Democrats. Virginians should remember every time they go to the gas pump this summer that Senate Democrats stood in the way of lowering gas prices. “

Senate Democrats said the Youngkin proposals would damage Virginia’s transportation program, especially for road maintenance, while doing little to help consumers.

“This whole thing has been absurd,” said Senate Majority Leader Dick Saslaw, D-Fairfax, who used to be in the retail gasoline business and routinely lectures fellow legislators on how fuel markets work.

Saslaw noted that Maryland’s gas tax will rise from 36 cents a gallon –already almost a dime more than Virginia’s tax –to 43 cents on Friday because of the inflation index applied there. (Maryland also instituted a one-month gas tax holiday this year. ) But he contends that Maryland’s roads are better maintained than Virginia’s.

“The roads are in the worst shape I’ve ever seen them,” said Saslaw, who sponsored a transportation funding package in 2020 that included an inflation index for the first time to keep up with the cost of asphalt and other road construction products. “It’s because they don’t have the maintenance money.”

Still, consumers are looking for relief from higher gasoline prices, with the average price of gasoline in Virginia rising by $ 1.75 a gallon from a year ago, so a rise in motor fuel taxes is ill-timed.

“Eventually, this is going to be passed onto the consumer,” said O’Conner at the petroleum and convenience marketers association.

On Friday, the state tax on gasoline and blended fuels –as well as alternative fuels such as compressed natural gas –will rise from 26.2 cents per gallon to 28 cents per gallon. The tax on diesel fuel will increase from 27 cents per gallon to 28.9 cents per gallon. The taxes are applied when the fuel leaves the wholesale distributor and not on retail sales.

Wholesale taxes applied at the regional level across the state, including the Richmond area, will rise from 7.7 cents per gallon to 8.2 cents per gallon.

The increase in the petroleum storage tank fee was triggered by the decline in the state fund for leaking tanks. Under state law, if the fund “has been or is likely in the near future to be reduced” below $ 3 million, the fee must increase from 0.02 cent per gallon to 0.06 cent per gallon. If the fund reaches $ 12 million, the fee will revert to 0.02 cent per gallon.

Comptroller Randy McCabe, in the Department of Accounts, notified the Department of Motor Vehicles on May 19 that the fund had fallen below the minimum threshold. DMV said it then “initiated the fee change, effective July 1.”

None of this is stopping Virginians or other Americans from driving for vacations over the July 4th holiday weekend.

AAA Mid-Atlantic predicts a new record for auto travel over the holiday, despite higher gas prices. The organization expects 1.2 million Virginians to travel by road over the holiday.

“There’s just so much pent-up demand to get back out there,” AAA spokesman Morgan Dean said.

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