Watch CBS News
By Sarah Ewall-Wice
Updated on: June 1, 2022 / 7:56 AM / CBS News
As gas prices remain near record highs, New York has become the latest state to suspend its gas tax in an effort to give drivers some relief at the pump. The suspension of the 16-cents-per-gallon tax runs from June 1 through the end of the year.
The national average for a gallon of gas hit $4.62 for regular unleaded gas on May 31. Diesel gas prices hit a record high on May 18 at $5.58 per gallon, according to tracking by AAA. In New York, gas prices hit a record in late May as well at $4.93 a gallon before easing slightly.
The climbing prices come as millions of Americans are set to hit the road on vacations over the summer for the first time in a couple of years after travel plunged during the coronavirus pandemic. AAA forecast the season would kick off with 39.2 million people traveling over the Memorial Day weekend, up from last year and just below pre-pandemic levels.
European Union leaders on Monday the vast majority of Russian oil imports into the bloc by the end of the year as part of the ongoing effort to cut ties with Russia and inflict financial pain for the country’s invasion of Ukraine. But even before the invasion, gas prices were on the rise as demand increased with pandemic related restrictions easing.
At the federal level, the Biden administration at the end of March announced the release of one million barrels of crude oil from the Strategic Petroleum Reserve per day for the next six months to help serve as what the White House called a bridge as production ramps up. It comes after a release of 30 million barrels in early March and 50 million barrels last fall.
The move is not working the way consumers may have expected, said Patrick De Haan, head of petroleum analysis at GasBuddy.
“Everyone’s expecting that the action immediately pushes prices down, but there’s a lot of complications where that may not be the case — but they are probably preventing oil prices from exploding or going up even more dramatically,” De Haan said.
Meanwhile, states have their own gas taxes and fees. State gas tax and fees averaged 38.69 cents at the start of this year, according to the American Petroleum Institute. Some states have already begun to suspend gas taxes in an effort to help consumers.
De Haan said the move has brought down prices in every state where it has been implemented so far. However, when the suspensions end, gas prices immediately spring back up as tax collections begin again.
The Tax Foundation state gas taxes could reduce prices, it was not the most efficient tax relief, calling it “good politics than good policy.”
Here are the states suspending gas taxes:
The governor of New York announced the state would cut its tax on regular gas and diesel to help provide relief to consumers as part of the state budget in April. The 16-cents-per-gallon suspension of the gas tax runs from June 1 through December 31. State officials were also encouraging local officials to do the same. Gov. Kathy Hochul said the tax cut would cost the state $585 million.
On March 23, lawmakers in the state House and Senate passed a bill suspending the state’s 25 cents per gallon motor vehicle tax for retail customers, which has the backing of Connecticut Governor Ted Lamont. The temporary measure started at the beginning of April and runs through the end of June. In mid-March, Governor Lamont said the tax cut could cost about $90 million.
On March 18, Georgia Governor Brian Kemp signed a bill to temporarily suspend the state’s excise tax on motor fuel sales. The state’s rate is 29.1 cents per gallon for gasoline and 32.6 cents per gallon for diesel. The suspension lasted through May 31, 2022 and applied to gas and diesel but also some other forms of motor fuel such as liquid propane gas.
Maryland became the first state to suspend its gas tax on March 18. The emergency legislation suspended the tax for 30 days and applied to the 36.1 cents per gallon tax on gas and 36.85 cents per gallon tax on diesel fuel. The move was expected to cost the state $100 million.
A growing number of other states have also proposed and moved forward with measures to suspend gas taxes. In Michigan, the state Senate passed a bill that would cut the state gas tax from mid-June through mid-September. The legislation now heads to the state House.
In Florida, the governor signed a budget in May that includes a one-month gas tax holiday this fall. The measure will cut the state’s 25.3 cents per gallon gas tax from October 1 through October 31. According to the state, it would save consumers $200 million.
CBS News reporter covering economic policy.
First published on May 31, 2022 / 3:55 PM
© 2022 CBS Interactive Inc. All Rights Reserved.
Copyright ©2022 CBS Interactive Inc. All rights reserved.
Watch CBS News