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Gas Tax Cap Doesn't Lower Pump Prices

Posted January 1, 2007
Updated January 2, 2007

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— Although lawmakers capped the state gas tax last year, heading off a scheduled New Year's Day increase of 3 cents per gallon, drivers still see higher prices at the pumps than a year ago.

The average price of a gallon of regular unleaded in the Triangle is $2.29, which is 6 cents higher than one month ago and 12 cents higher than a year ago.

"f you're talking 3 cents, you're nickel-and-diming people," driver Scott Higbee said. "You have that tax, you still have the excise tax, you have other state taxes, you have the federal tax."

"If they lowered that tax about $1 more, that would make a difference. People would buy more gas and would travel more," driver Seresa Parker said.

Even with the cap, drivers who fill up at North Carolina pumps pay the highest gas taxes in the Southeast.

The state takes about 30 cents from each gallon sold, and the federal gas tax is just over 18 cents a gallon.

Some retailers said a cut in the gas tax might not trickle down to consumers.

The manager of the Capital Boulevard Exxon said he's taking a loss of 3 cents a gallon on his premium unleaded. If the gas tax dipped 3 cents a gallon, he said he would keep his price the same to break even.

"There's always going to be a loophole through everything, so they're going to find a way regardless of the tax to make their money. It's a capitalist society," driver Dorey Freeman said.
4 Comments

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  • counselorwillingham Jan 4, 2007

    The tax on gas in this state is way higher than the majority of the surrounding states but the road ways here are in poor shape. I think that some one should seriously look into where these funds are really being spent. It is sickening to know that only seventy cent of every dollar I spend at the tank is actually going to transport myself and my family and I am still driving on some of the worst highways I have ever seen.

  • migsander Jan 3, 2007

    If the gas tax is used to fund hughway projects, then I am all for it. But, with poorly built highways, like the I-40 project, and other road project taking longer than expected, is having a higher gas tax really worth it?

  • killerkestrel Jan 2, 2007

    Yes, the main reason gas is more expensive in NC is because of the gas tax. NC has one of the highest in the Southeast. But one must remember that NC’s highway funding mostly comes from the gas tax, supplemented by other user fees and tax on vehicles. VA gets much of it’s highway funding from the general fund (income and sales taxes), while NC actually takes money from the gas tax and puts into the general fund. All around the USA, governments are facing a tough decision, to increase funding, or to neglect our transportation system.

  • OLD PIRATE Jan 2, 2007

    Mark, the real story is margins at the pump. Va and SC both have similar pump prices with hugh tax savings. NC dealers continue to sell gas at below national averages with our BIG state tax. Don't blame the station for prices in NC, look to our friends in the legislature...