State's gas tax increase in effect
HARRISBURG — Taxes on gasoline and diesel in Pennsylvania were higher as of Wednesday, the first of three increases being imposed by a new law, but that does not necessarily mean that motorists filling up their tanks in the state will pay more at the pump than they did in 2013.
Effective on Wednesday, the state Department of Revenue said gasoline taxes are going up by 9.5 cents per gallon while diesel taxes are going up by almost 13 cents per gallon. The tax increase applies only to transportation fuels and a number of fuel distributors and gas station owners say they plan to pass along the higher wholesale cost.
However, the Energy Information Administration is expecting a slight overall drop in average U.S. gas and diesel prices in 2014.
The agency's projected annual average regular gasoline retail price is expected to fall from $3.50 per gallon in 2013 to $3.43 per gallon in 2014. Diesel fuel prices, which were projected to average $3.92 per gallon in 2013, are expected to fall to $3.77 per gallon in 2014.
AAA expects gas prices to average slightly less in 2014 as refineries continue to expand production capacity and increasingly use North American crude oil.
According to AAA, the Pennsylvania gas average was $3.48 per gallon on Tuesday, up 5 cents in the last week. Diesel was $4 per gallon. The national average was $3.32 per gallon of gas and $3.87 per gallon of diesel.
The higher fuel taxes are the key element of major transportation funding legislation approved in November by Gov. Tom Corbett and state lawmakers in an effort to stem a rising backlog of bridges, highways and mass transit agency facilities in need of repairs or modernization.
The tax and fees increases, scheduled to be fully in effect within four years, are designed to raise an additional $2.3 billion a year for transportation purposes. Supporters say the new money is long overdue to address the demands of safety, quality of life and commerce, although opponents in the Legislature protested the size of the tax increases.
The law had support from major business groups and the AARP. Labor unions supported it, although they protested one element that would roll back wage requirements on some projects.
Under the law, another wholesale fuel increase will take place in a year and then again two years after that, in 2017.