After cap expires, gas tax to go up by a tenth of a cent
North Carolina drivers should see a slight increase in prices at the pump starting July 1 when the state’s gas tax goes up by a tenth of a cent.
The planned increase follows the expiration of a cap on the gas tax that was put in place by state elected officials last year.
They capped the taxat 37.5 cents per gallon between July 1 of last year and June 30, with some arguing that the cap would help drivers save money.
Now starting July 1, the motor fuels tax will increase to 37.6 cents per gallon, according to a N.C. Department of Revenue press release.
The rate is made up of a flat rate of 17.5 cents a gallon and a wholesale component that can change, according to the release.
The variable wholesale component of the tax goes up by either 3.5 cents, or 7 percent of the average wholesale price of motor fuel during the preceding six-month base period, whichever is greater.
The last increase that went into effect before the cap was put in place started Jan. 1, and took the rate from 35 cents to 38.9 cents a gallon, the highest it had ever been.
For the upcoming increase, Trevor Johnson, a spokesman for the department, said in an email that legislative approval is not required, but the state’s revenue secretary must make an announcement.
Even without the July increase, North Carolina had a higher total gas tax compared to other states in the region.
According to the American Petroleum Institute’s “State Motor Fuel Taxes 2013” report, North Carolina’s total state and federal gas tax was 56.2 cents. The report was last updated in April.
That includes the 37.5-cent state motor fuels tax, an almost 0.3-cent-state inspection tax, and the federal 18.4-cent tax.
The state’s total was above Virginia’s 38.4-cent total state and federal gas tax, South Carolina’s 35.2-cent per gallon total, Tennessee’s 39.8-cent per gallon total tax, and Georgia’s 46.9-cent per gallon total gas tax, according to the report.
Gregg Laskoski, senior petroleum analyst for the gas price-tracking website GasBuddy.com, said he believes North Carolina’s one-tenth of a cent gas tax increase is “modest.” GasBuddy is a group of local websites where visitors can post and view recent retail gas prices.
“It’s about as modest an increase as you could possibly get, considering all the other things that are going on in the country,” Laskoski said of the increase. “Many other states are forced to have to increase their fuel taxes and it’s probably the same reason North Carolina is looking at this – it’s because they have to cover funds that are no longer available from the federal government.”
Fluctuations due to taxes aside, the national average price per gallon of fuel was moderating this week. On Wednesday, the national average was $3.604 per gallon, compared to $3.464 in North Carolina, and Durham’s average of $3.485.
Prices have the potential to rise during the summer, he said, not necessarily due to increases in demand, but also because of volatility in the weather. There is the potential for disruption of refinery operations during hurricane season, he said.