Local News

Expiring ethanol credit to add to gas price jump

Posted December 27, 2011

Map Marker  Find News Near Me

— Lack of action by state lawmakers and Congress is expected to raise gas prices in North Carolina by more than 8 cents a gallon, starting Sunday.

Half of the increase comes from the state. North Carolina's gas tax is linked to the price of gas and is adjusted every six months. Because gas prices have gone up since July, the state tax, which is already one of the highest in the country, is going up by 3.9 cents a gallon on Jan. 1.

House Republicans attempted to cap the gas tax at its current level of 35 cents a gallon during a brief session last month, but the state Senate adjourned before taking up the measure.

The rest of the impending increase is courtesy of Congress.

For decades, the federal government has subsidized ethanol to keep its price down and encourage people to use it. That subsidy cost taxpayers about $6 billion dollars last year, so Congress decided not to renew it.

When the credit runs out Sunday, the ethanol required in a gallon of gas will cost 4.5 cents more.

Gas station owners like Mike Whalen are stuck in the middle. He said angry customers shouldn't blame him for the higher prices.

Gas pump generic Gas prices in NC to jump in new year

"The state needs money. The federal government needs money," Whalen said. "It's not us getting the money. We're collecting it on their behalf."

The wholesale price Whalen pays for gas went up 17 cents over the past two weeks, he said, so pump prices are more about the market moves than the government moves.

"Whatever the competitors do, we will follow, but we know we can't take an 8.5 cents hit without putting it on the street at some point in time," he said, noting that the full increase likely won't show up on the pump price immediately.

"It'll be relatively quick, probably within a week," he said.

Drivers like Richard Chavis said they don't like paying more for gas, but they have no choice.

"(It's) bad on people on fixed incomes, but (there is) nothing I can do about it," Chavis said.

202 Comments

This story is closed for comments.

Oldest First
View all
  • jivancic Dec 29, 2011

    All states and the federal government should follow NC in indexing their highway user fee to the price of fuel. And those funds should go to keep the transportation infrastructure safe and effective. Count the number of bridges on roads in NC.

    Many of you probably asked for a halt to the federal “ethanol subsidies,” VEETC or the “blenders credit.” You got that. To even the playing field, you might want to write to Congress about also halting subsidies for production and delivery of petroleum fuels, too.

    Sow instead of all taxpayers paying for encouraging the use of ethanol as a national security, energy security, military flexibility, pollution control solution (which benefits all taxpayers); only those who actually use the fuel have to pay for it.

    And don’t forget about the performance benefits of ethanol. For more on that, see http://advancedbiofuelsusa.info/new-engine-technologies-could-give-new-life-and-larger-markets-to-ethanol and http://advancedbiofuelsusa.i

  • Thought Criminal WS Dec 29, 2011

    Apparently you and princeton don't know enough. Hydroelectric is NOT without impact on the environment and does cause harm which is why energy sources beyond hydro were saught after the 1880's when the impacts were understood.

    Speaking of not being able to change the truth... internet can be edited and changed to match a politic agenda. Books are hard sources that can't be censored after they are printed and distributed. Go read a book, preferably an older one not tainted by the green-eco-nazi movements and stop buying the junk you're being spoonfed.

    Saying a lie enough still doesn't make it true.

  • WooHoo2You Dec 28, 2011

    Hydroelectric is NOT an alternative energy source, it is a primary renewable energy source.

    The "altenergy.org" link is propaganda redefining it to a political agenda. At best, and from thier own website, this is the definition of "hobbyists" with interests and are specifically NOT scientific. They also do not wish to disclose who comprises this group or be directly linked to the data they present, but you'd have to read the fine print for that info.

    Woohoo, time to go to school and open a book.-kilquian

    Screaming 'liberal lies' does not change the truth. Alternative energy: (energy derived from sources that do not use up natural resources or harm the environment)

    But what does Princeton know...

    http://wordnetweb.princeton.edu/perl/webwn?s=alternative%20energy

  • WooHoo2You Dec 28, 2011

    Just think, those bad ol oil companies are making RECORD PROFITS on about 3 cents per gallon of gas, while the state of NC is making 47 cents per gallon. So who is robbing who here? -mep

    Don't see many BP trucks repairing the roads or Exxon's fleet investigating accidents do we? Now there is no reason the tax should go up however you are comparing apples and hammers in your statement.

  • mep Dec 28, 2011

    Ethanol... the "alternative" energy no one wants, or needs. Without heavy govt subsidizes, the ethanol industry would not exist... beyond its industrial uses that is. How about the govt no longer requiring its use? No... we can have less govt! Sure hope the extra money the State will be stealing from us will be used for something worthwhile. Just think, those bad ol oil companies are making RECORD PROFITS on about 3 cents per gallon of gas, while the state of NC is making 47 cents per gallon. So who is robbing who here? Are YOU getting your monies worth? I'm not. All those DOT workers working hard enough? Notice how our State farms out many of the highway jobs to out of State employers (illegals). Yup... tax dollars at work!

  • Rebelyell55 Dec 28, 2011

    Why do people think producing more oil won't lower prices when a reduction in production always raises it?
    saturn5
    December 28, 2011 8:16 a.m.... Because, if there is plenty of gas, they lower production to keep prices up. Reducing demand for gas does not always lead to reduced prices, in most cases they raise the price to maintain their profit margin. Also, America does have cheaper gas than a lot of nation, but that is largely due to the fact that America consumes a large quanity of gas, so therefore it's cheaper.

  • Rebelyell55 Dec 28, 2011

    BTW - this is NOT a tax increase. Like all sales taxes, the tax is based on a percentage of the price. It isn't the state's fault if gas companies charge more for gas.
    bill0
    December 28, 2011 2:44 p.m.
    Your wrong, it's a tax increase, while it's tried to the wholesale price of gas, it's still would go up even if gas was 2.50 a gallon right now. What's still is amazing is the lies that wholesalers and retailer tell people, look at a gas station selling for 3.13 and two miles away, the station are selling 3.27 and two more miles, it's 3.17 then you see a few at 3.30, then one at 3.13 again, all in less than 10 miles each other. I know today is Wednesday and some just ain't raised their gas price up to 3.27. Also note there was no change in the stock market that would create the change in gas prices that the guy stated in article.

  • cjw6105 Dec 28, 2011

    All anyone needs to know about high gas prices will be clear on the political red and blue state map. Blue equals higher, red equals lower. This is seldom wrong.

    What makes it so bad here in NC is that we have Mississippi wages and California gasoline prices.

    I just completed a trip to Charlotte and back, and I-85 was an awful communte; I'm sorry again that I didn't take NC49. With all the gas taxes we've endured, why is this? I-85 to Charlotte is decades behind the traffic. And don't forget our state's worst highway nightmare: I-95 from border to border. Not one mile of 3-lane pavement will you find on arguably the nation's heaviest-traveled interstate corridor that passes through NC.

    But hey, what's another 4 cents a gallon at the pump next week? Not to worry- maybe we can win the EDUCATION lottery, right Bev?

  • Thought Criminal WS Dec 28, 2011

    Hydroelectric is NOT an alternative energy source, it is a primary renewable energy source.

    The "altenergy.org" link is propaganda redefining it to a political agenda. At best, and from thier own website, this is the definition of "hobbyists" with interests and are specifically NOT scientific. They also do not wish to disclose who comprises this group or be directly linked to the data they present, but you'd have to read the fine print for that info.

    Woohoo, time to go to school and open a book.

  • Follow_The_Money27617 Dec 28, 2011

    JOHNNY is all talking points. You can tell by his frequent use of two vague ideologies.

More...