The Daily Item, Sunbury, PA


May 11, 2014

Act 89 gas tax revenue is about what state expected

SUNBURY — Revenue from Act 89, the state transportation bill passed in November that raised the gasoline tax, is running about where state officials expected, according to the Pennsylvania Department of Transportation.

According to the state Department of Revenue, in addition to general fund collections, the Motor License Fund received $285.2 million in April, $15.4 million above estimates, PennDOT spokesman Rick Mason said.

Fiscal year-to-date collections for the fund — including the commonly known gas and diesel taxes as well as other license, fine and fee revenues ­— total $2.1 billion, which is $28.7 million, or 1.4 percent, above estimates.

Right now in Pennsylvania, state and federal excise taxes tack on nearly 61 cents per gallon, according to the American Petroleum Institute’s latest report, dated April 25. The state tax adds about 42 cents per gallon of gasoline, and the federal excise tax is 18.40 cents per gallon, the institute said.

The gas tax contributes 10 percent to 15 percent of the price of a gallon of gas, but it’s just one of several factors, and those are constantly fluctuating, said Patrick DeHaan, senior petroleum analyst with, a website that tracks local gas prices nationwide.

“It would be much easier if oil was what we dumped into our cars,” he said.

Usually, the elements that make up the price at the pump are: 75 percent is the crude oil price, 5 percent to 10 percent is the cost of refining, 4 percent to 6 percent is distribution and marketing and 1 percent to 2 percent is revenue for the station owner.

There is a wholesale price of gas before tax. The Northumberland Terminal for fuel, for instance, has nine suppliers with varying wholesale prices. As of Friday, the lowest was $2.77 per gallon, the highest was $3.11 and the average was $2.94. A gas station’s price depends in part from which distributor it buys.

“Each (distributor) may pay a different price for crude oil, which is why they’re charging different prices,” DeHaan said.

But here, it gets more complicated. Take the distributor charging $3.11 per gallon. “That guy may be very low on supply,” DeHaan said. “So he jacks up the price to build more inventory.” The cheapest distributor at $2.77 “may be saying I have so much supply, I’m enticing buyers with a low price,” he said. “He drops his price to encourage everyone to buy from him.”

“Each supplier has a different reason for charging what they do,” DeHaan said. “That adds to the complexity of gasoline.”

As it is, refineries also slow down production at this time of year, he said. When supply goes down, prices go up.

Some good news is that wholesale prices have been declining in the past week, DeHaan said, and stations “are probably sitting on several hundred gallons they bought at a wholesale price.”

Remember, the wholesale price plays into the pump price, and gas stations constantly buy full or partial loads — it’s rare to see a station that has run out of gas. Whatever price per gallon they charge for the current supply will figure into the price per gallon for the top off.

As of Saturday, with an average $3.81 per gallon, Pennsylvania was ranked 10th in the nation for gas prices, behind Hawaii and California, where gas is more than $4.20 per gallon, according to AAA. The leaders were Connecticut, Alaska, New York, Washington state, Washington D.C., Oregon and Illinois.

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