Connecticut gas trends expensive as prices across the country continue to increase in a blink of an eye. So, what are we paying for with each gallon we pump?
Taxes on Gasoline in Connecticut
- Right now if you fill up in our state you’re paying about 70 cents per gallon just for taxes when we fill our tanks. If you need 15 gallons, about $10.50 is going to Uncle Sam.
- Here’s the breakdown:
- Federal excise tax of 18.4 cents per gallon.
- State excise tax of 25 cents per gallon.
- And then, there’s our Petroleum Gross Receipts Earning Tax, which is now at nearly 27 cents, according to Chris Herb, the president of CT Energy Marketers Association.
“That’s the tax that is placed on the wholesale price of gasoline that is passed along at the pump,” Herb said.
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The CT Energy Marketers Association represents people who own, operate and distribute fuel to about 1,000 gas stations in Connecticut.
What Wholesale Prices Mean For What You Pay
Herb said what's also factored into the cost per gallon is sky-high wholesale prices that continue to rise and he said gas station owners need to cover their costs too, which vary from town to town.
“The simplest way to put it is a 1,500 square foot house in Greenwich costs different than a 1500 square foot house in Naugatuck, CT,” he said.
That’s why gas prices across the state run the gambit, he said.
“People in Greenwich that work at gas stations don’t work for minimum wage. They get paid more, insurance is more expensive, the rent to property is more expensive than it is in other places,” Herb said.
Gas Prices Near Highways
But why do gas prices tend to be a lot higher near a highway?
“We see the price of gasoline, so it highlights, ‘Wow that’s a higher price than it is a mile down the road,’ but it’s the same thing for the milk that they’re selling, the bread that they’re selling, the cigarettes they're selling, so it is a function of the location more than someone trying to take advantage,” Herb said.
Impact on Gas Stations
With long lines and high prices, it’s easy to assume gas station owners are making a ton of money right now but, Herb stresses, that’s not the case.
He said many of his members are underwater. With wholesale prices skyrocketing, owners don’t want to pass on costs to customers instantly because they still want to stay competitive, he said.
Impact of Ban on Russian Oil
As for President Joe Biden’s sanction on Russia oil, Herb said to expect a price shock.
“Not having access to the supply means we need to get it somewhere else, and the question is, 'Are we going to drill more here and extract more here? Are we going to have to depend on nations that aren’t favorable to us like Iran or Venezuela that have horrible human rights records?'”
Herb said it’s crude oil that comes to the United States from Russia and goes to a refinery. That’s just a small percentage of our imports.
Gasoline in Connecticut is shipped into New Haven or driven into our state, “Canada, the Caribbean, the Gulf Coast, boats will come from all over the world to the northeast to deliver products,” he said.
Right now, we’re all looking for a solution to stop the rise in prices.
Biden said the U.S. will be releasing some of our oil reserves, but Herb said it shouldn’t make much of a difference in the dent we’re already feeling on our wallets.
“The last two releases that we have done did nothing to stop prices from increasing,” he said.
Gas Taxes
What about eliminating one of our gas taxes?
Herb said it would be the temporary bandage consumers could use right now, but with wholesale prices increasing so rapidly we probably wouldn’t even see the price difference at the moment because those wholesale gas prices just keep rising.
