State taxes adding about a quarter to gas prices, U.S. government says

Current prices are higher than the seasonal average because of the impacts from Hurricanes Harvey and Irma.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Oct. 3, 2017 at 9:41 AM
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Oct. 3 (UPI) -- On average, U.S. consumers are paying about 28 cents more for a gallon of gas than they were last year because of higher taxes, the government said.

A briefing from the U.S. Energy Information Administration published Tuesday said that the average taxes and fees in all 50 states, plus the District of Columbia, in place as of July 1 added 27.9 cents to the price per gallon.

Motor club AAA reports a national average retail price for regular unleaded gasoline at $2.54 per gallon, up 32 cents from this date last year. The four-week moving average, based on federal data, is 38 cents higher than last year, though recent prices are skewed higher because of the impacts to the nation's refinery sector from Hurricanes Harvey and Irma. The current four-week average is higher than a similar period in 2015 by 29 cents.

Harvey made landfall in Texas in late August and hit the large concentration of refineries in the region. Hurricane Irma followed in September and hit Florida, which caused further market strains because the state has no refineries of its own and adjustments were needed to compensate for the lack of balance.

Nevertheless, EIA said higher state taxes were contributing to higher trends this year in gasoline prices.

"Gasoline buyers in the United States pay these taxes at the pump in addition to the federal tax of 18.4 cents per gallon, which has remained unchanged since 1993," the report said.

Gasoline prices usually decline in the waning months of the year because of travel miles move lower after the summer. The national average price for a gallon of gas on Sept. 11, $2.69, was the highest for that date in roughly two years.

EIA said in its latest monthly forecast it was expecting prices at the retail level to decline as the nation's refinery sector recovers from recent hurricanes. The national average for October should be $2.40 per gallon, but that estimate is still 10 cents higher than the federal government expected in its August forecast.

Gas prices by December should be $2.23 per gallon. The highest price on record was $4.11 per gallon in July, 2008.

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