(Washington)—Increasing the gas tax does not result in a commensurate penny-to-penny increase in the retail price motorists pay at the pump, a study of the market impacts of five state gas tax increases enacted in 2013 found.
The analysis, by Dr. Alison Black, chief economist for the American Road & Transportation Builders Association (ARTBA), found, on average, the price for a gallon of regular gasoline the day after a state gas tax increase goes into effect only reflects about 22 percent of the new levy. A month after enactment, only about a third of the levy shows up in the pump price, she says, and thereafter, it is not a significant retail price factor.
The study also found that since 2005 the average weekly price of gasoline nationally has fluctuated, on average, five cents per gallon. Black says a modest increase in the federal gas tax rate to restore the purchasing power of the user fee—last adjusted in 1993—would likely be “lost” in the week-to-week price fluctuation experienced at the pump.