Connecticut Fuel Tax to Increase Cost of Gasoline on July 1

HARTFORD, Conn., June 30 -- Effective July 1st the Connecticut General Assembly passed a transportation bill that include provisions for raising the state's tax on gross earnings derived from the sale of petroleum products. The first increase will take effect July 1 and will cost consumers roughly an extra penny per gallon.

Gene Guilford is director of ICPA (the Independent Connecticut Petroleum Association), which represents the majority of Connecticut's motor fuels dealers. Guilford released the following statement today in response to the General Assembly's action raising taxes on petroleum products.

"Governor Rell's transportation package, which was passed by the Connecticut legislature, is a broad measure with many laudable provisions. However, the gasoline dealers of Connecticut are seriously opposed to funding the bill by raising the tax on gross earnings from the sale of gasoline and other petroleum products.

"This measure will result in raising the price of gasoline for Connecticut consumers at a time when gasoline price are already at near record highs due to world energy demand and energy price speculation on the NYMEX.

"At present, Connecticut consumers pay 25 cents per gallon state excise tax on gasoline, and another 18.4 cents per gallon federal excise tax on gasoline. On diesel fuel, Connecticut consumers pay 26 cents per gallon state excise tax and another 24.4 cents per gallon federal excise tax. These prices are already the third-highest excise taxes in the region. In addition, Connecticut motor fuel prices reflect the effect of the "hidden" state tax on gross earnings derived from the sale of petroleum products, currently at 5%. The new legislation raises the rate on that tax to 5.8% effective July 1 -- tomorrow -- and continues to increase the tax rate to as high as 8.1% by July 1 of 2013.

"The average 'fill-up' for the family car is 20 gallons. Based on an average retail price of $2.31 per gallon, this cost today is $46.20. Of this $46.20, $8.68 is state and federal excise tax, and the Connecticut Gross Earnings Tax adds another $2.00 [10c per gallon x 20 gallons], for a total of $10.68 in just taxes per 20 gallon fill-up.

"The average 'fill-up' for a trucker using diesel fuel is 150 gallons. Based on an average retail price of $2.55 per gallon, this cost today is $382.50. Of this, $75.60 is state and federal excise taxes, and the Connecticut Gross Earnings Tax adds another $15.00, for a total of $90.60 per 150 gallon fill-up.

"When a tax on gasoline goes up, so does the price of gasoline and diesel -- end of story. The gross earnings tax is a tax on petroleum products."