These states have reduced gasoline taxes to offset rising prices. Others may follow

Several states are taking steps to temporarily reduce gasoline taxes in hopes of bringing some relief to Americans who are experiencing soaring prices at the pump.

Prices for a gallon of regular gasoline were $4.25 nationally on Monday, according to AAA, down from $2.82 a year ago, but down slightly from last week’s level.

Skyrocketing gas prices have their roots in the faster-than-expected economic recovery from the pandemic, which triggered the highest inflation in decades amid strong consumer demand, an influx of government stimulus and global supply chain disruptions.

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But in recent weeks, the war between Ukraine and Russia has driven world prices even higher as it hampers the world’s access to energy supplies. Brent crude, the international benchmark, soared above $111 a barrel on Monday as European Union countries considered joining the United States in banning Russian oil imports and Russian-Ukrainian talks didn’t seem to show any signs of success.

A car drives past a gas station sign in Annapolis, Maryland on March 14, 2022, as record high gasoline prices hit working-class Americans with already rising inflation. (Jim Watson/AFP via Getty Images/Getty Images)

A Wall Street analyst has estimated that rising fuel prices could cost the average American household an extra $2,000 a year.

Here’s a look at the steps some states are taking to ease the financial strain on drivers:

California

California Democrats launched a proposal last week that would send a $400 rebate to every taxpayer in the state, whether they drive or not.

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The plan comes amid mounting pressure on California lawmakers to deal with sky-high prices at the pumps, a week after gasoline costs hit another record high. California, as is usually the case, had the highest gas prices in the country, with the cost per gallon hitting $5.85 on Monday — well above the national average. In some counties, the average price reaches $6.47 per gallon.

Gasoline prices, all above $5 a gallon, are displayed at a gas station in Rancho Cordova, Calif., Monday, March 7, 2022. (AP Photo/Rich Pedroncelli)

Gasoline prices, all above $5 a gallon, are displayed at a gas station in Rancho Cordova, Calif., Monday, March 7, 2022. (AP Photo/Rich Pedroncelli/AP Newsroom)

At a news conference, Assembly members who introduced the bill argued that the refund was a better option than temporarily suspending the 51-cent-a-gallon gasoline tax because it gives recipients more flexibility in how they use the money. They hinted that they wanted the money flowing in the spring.

California Governor Gavin Newsom, a Democrat, has previously expressed support for easing the pain of rising gas prices while waiting to implement a 5.6% tax hike that is expected to come in effective July 1. But an LAO analysis found that would only save drivers about 3 cents per gallon. Newsom’s office also raised the possibility of a discount that could be given to residents with California-registered cars.

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Separately, California state Republicans introduced a bill in January that would immediately suspend the gas tax in response to soaring prices and fill projects from the $45 billion surplus. of the state, but the proposal did not get enough votes.

Georgia

Georgia Gov. Brian Kemp, a Republican, signed a bill Friday that temporarily suspends the 29.1-cent-per-gallon gasoline tax until May 31.

A driver putting 12 gallons in a tank of gas would save $3.49 under the tax exemption. The average gasoline price in Georgia was around $4.11 on Monday, slightly lower than the national average. Kemp said the legislation would help “ease the burden consumers feel at the pump”.

Georgia Governor Brian Kemp

Georgia Governor Brian Kemp speaks during a ribbon-cutting ceremony for the Mason Mega Railroad Station at the Garden City Port Terminal, November 12, 2021, in Garden City, Georgia. (Sean Rayford/Getty Images/Getty Images)

“While we can’t fix everything Washington has broken, we are doing our part to lessen the impact on Georgians’ wallets,” he said in a statement.

Still, experts have warned that the pause could take several days before it begins to trickle down to consumers. This is because fuel tax is an excise tax imposed on the sale of gasoline, which means it is paid by distributors, not consumers directly.

Petrol stations have already paid the fuel tax they ordered before the suspension; it is unclear when untaxed fuel will begin to reach the pumps.

“It’s not immediate relief,” AAA spokesperson Montrae Waiters told the Atlanta Journal-Constitution.

Maryland

Maryland suspended its 36-cent-per-gallon tax on Friday for a month to offset rising prices. The emergency bill signed by Gov. Larry Hogan, a Republican, urges gas station owners to immediately pass on savings to the pump.

Someone filling a 12 gallon tank would save about $4.32 under freezing.

“As we continue to stand in solidarity against Russian aggression in Ukraine and as Marylanders face the impact of soaring inflation with the rapidly rising average price of gas, this bipartisan action will provide some relief. pain at the pump,” Hogan said at the signing ceremony. “That, of course, is not going to be a panacea.”

Virginia

Virginia Governor Glenn Youngkin, a Republican, has called for a three-month suspension of the state’s 26.7 cents per gallon gasoline tax.

“This rise in gas prices is hurting Virginians, and we need to do something about it,” Youngkin said in a statement. Like other Republicans, Youngkin blamed the Biden administration for contributing to higher prices by enacting policies that “constrained” the country’s domestic oil supply.

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