I-Team Investigation: CT fuel prices still near national average after gas tax suspended
(WFSB) - Fourth of July weekend is here, and high gas prices continue to drain drivers.
Many are wondering what’s happened to the savings we were supposed to see when the state suspended the gas tax.
Comparing the averages from last year and this year is what prompted Eyewitness News to do this investigation.
Just before Independence Day last year, the national average was $3.11 and Connecticut’s average was $3.12.
This year, it is $4.85 nationally and $4.83 in Connecticut.
We’re still hanging around the national average.
Since the state gas tax was suspended in April, we thought we’d see our prices drop by 25 cents, especially considering most of the nation didn’t suspend its gas tax.
So where did that quarter go? Why are we still paying close to the national average?
“Someone in Europe says I’m willing to pay sometime double what you’re willing to pay here in Connecticut,” said Chris Herb, President of the Connecticut Energy Marketers Association.
Our fuel comes via ships and barges in New Haven, and Herb says Connecticut’s supply has been uniquely affected by the war in Ukraine.
“When fuel is on a pipeline, it’s going to its destination. When fuel is on a barge, it can be moved and turned to another part of the world,” said Herb.
Herb says it’s happening.
Bidding wars have resulted in ships, as close as this one is to the dock, literally, turning around at the last minute.
“That tanker, that barge might go across the ocean to supply Germany or other parts of Europe,” said Herb. “We have to pay a little bit more and sometimes a lot more, to keep it here, instead of having it go across the ocean.”
Herb said that’s why we’re still mirroring the national average.
Dr. Kenneth Gillingham, Professor of Economics at Yale University’s School of the Environment, has a different opinion.
“I think what it means is that at least in the short run, the benefits of the gasoline tax holiday that we have are primarily going to the gas station owners, the distribution system owners,” said Gillingham.
“So you’re saying they’re pocketing our 25 cents a gallon?” Eyewitness News asked.
“For the most part, that’s right,” Gillingham said.
It’s an opinion that former President Obama shared in his book, A Promised Land.
When faced with endorsing a national gas tax suspension, Obama declined, saying:
“I was sure that consumers wouldn’t see much benefit. In fact, gas station owners were just as likely to keep prices high and boost their own profits as they were to pass the savings to motorists.”
When our state tax was suspended in April, we did see the savings at the onset.
Gillingham says it was offset when the price of oil started to fall.
“The owners of the firms have been slow to pass on these price declines,” said Gillingham.
Herb argues, that’s not the case in Connecticut.
“If you think as a retailer that you can take the tax back and put it in your pocket, the guy across the street is not going to let you do that, because he’s going to want your customer. That competition keeps everyone honest,” said Herb.
The state gas tax suspension ends on December 1.
President Biden wants to suspend the federal tax.
Gillingham suspects if it passes, drivers wouldn’t see the savings.
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