Here’s where drivers are seeing the biggest breaks on gas prices

Gasoline prices remain close to all-time highs, highest portfolios and budgets across the country. But there are some locations where drivers are taking some breaks and seeing prices go down, in large part because of legislators who have Suspension of gasoline taxes in their states.

Relief has been almost immediate in Maryland and Georgia, the two states that have so far enacted tax cuts. A third state, Connecticut, has also passed a law suspending its gas tax, but it will not go into effect in early April.

More states could soon pass additional measures to reduce or suspend gas taxes, with proposals currently in states like Ohio and West Virginia. It is a problem that is gaining momentum, as the national average gas price remains above $ 4 a gallon. But the consequences of a tax cut could fuel the problem, as lower gas prices lead to higher gas demand, which could further drive up prices, experts say.

“It reduces costs at the retail level, but it isolates motorists from the real reality of pricing,” Patrick De Haan, head of oil analysis at GasBuddy, told CBS MoneyWatch.

He added: “The consensus is that lowering taxes is a direct benefit to the consumer, and that direct benefit can increase gasoline consumption.”

Demand for gas in Maryland has already risen, although De Haan noted it could be due to drivers from neighboring states and from Washington, DC, who are driving across the border to fill up.

Higher gas prices have a very real impact on household budgets: a typical family may incur additional costs of $ 2,000 this year simply because of the higher costs, according to a Wall Street estimate.

But the reason for current gas prices of more than $ 4 is due in part to demand: Americans are driving more in 2022 as the economy recovers from the COVID-19 pandemic. But the supply has not kept up, which has raised prices. Russia's war against Ukraine has added to the pressure, leading to a recent rise in gas prices.

“Right now, supply is limited and if supply remains limited and demand increases, it can make the problem worse,” De Haan noted.

Meanwhile, some industry organizations argue that gas tax holidays do not provide significant relief to consumers, with a study by the American Association of Road and Transportation Builders finding that previous tax holidays only offered a 18 % of the reduction of taxes to the consumers.

But so far, data show that drivers in states with gasoline tax exemptions are enjoying significant price drops.

Georgia: A 32-cent drop

Gas prices in Georgia have dropped about 32 cents a gallon in recent weeks, according to AAA data. Drivers were paying about $ 4.26 per gallon on March 16, not far from the national average of $ 4.30 per gallon that day.

But after Georgia Gov. Brian Kemp signed a bill on March 18 to temporarily suspend the state excise tax on motor fuel sales, the price per gallon began to decline. The state rate is 29.1 cents per gallon for gasoline and 32.6 cents per gallon for diesel.

On March 29, Georgia motorists were paying about $ 3.94 per gallon, AAA said. That's about 30 cents less than the national average of $ 4.24 that day.

However, the tax cut is only temporary: it expires on May 31.

Maryland: a 41-cent drop

Maryland drivers have seen an even bigger profit as the average price of a gallon dropped from $ 4.23 on March 16 to $ 3.82 on March 29, a reduction of 41 cents per gallon.

Maryland, the first state to suspend its gas tax, suspended the tax for 30 days on March 18. This applies to the state tax of 36.1 cents per gallon on gas and 36.85 cents per gallon on diesel tax. The move is expected to cost the state $ 100 million.

Connecticut: Tax cuts in April

Connecticut drivers haven't seen much rest yet, but they're likely to experience relief in early April. That’s because a temporary measure to suspend the 25-cent-per-gallon state tax will begin in early April through late June.

Oil-producing states

Some states are experiencing below-average prices in part because of their location, such as Texas and Oklahoma, which are oil and gas-producing states. The average price per gallon in Texas was $ 3.87 on March 29, while Oklahoma residents are paying $ 3.81 a gallon, AAA said.

Potential tax rebates or exemptions

Residents of other states may soon be relieved by proposals from lawmakers to send discount checks or suspend gasoline taxes.

California Gov. Gavin Newsom has done just that proposed to pay $ 400 to the owner of a vehicle registered in California as a way to address rising gasoline prices. If the measure is approved, checks could be delivered in July.

In West Virginia, a group of Democratic lawmakers has called on Republican Gov. Jim Justice to convene a special session to suspend the state tax of 35.7 cents per gallon for 30 days.

Ohio State Senate Republicans have introduced a bill to temporarily reduce the rate of excise duty on motor fuel for both gas and diesel to 28 cents per gallon for five years. The current state tax is 38.51 cents.

Sometimes the relief is passed on to consumers immediately, but it can also take several days for the lowest prices to show up at the pump, GasBuddy's De Haan said. Stations usually refill their tanks every three to five days, so some stations may have to sell their current supply, which may still be subject to tax, before they can refill and sell gas without state tax. .

“There’s a cost to gasoline vacations,” De Haan noted. "It will help bikers, but we are digging into a deeper hole."

In:
• gas prices