It’s no secret that Connecticut’s gas prices are the highest in the nation. What state leaders want to know is, why?
At the Shell gas station in Hartford Monday morning Attorney General Richard Blumenthal said he is asking the General Assembly’s Democratic leadership to add legislation aimed at analyzing gas and home heating fuel pricing to the June 11 special session agenda.
Why not just ask the General Assembly to halt the July 1 increase of the gasoline gross receipts tax?
“We would be irresponsible to cut any taxes on gas,” Blumenthal said. He said until the state knows where the profits are going, lowering taxes won’t help the state figure out, “if anyone profits as a result.”
The gross receipts tax, which is based on the wholesale price of gasoline, will increase from 7 percent to 7.5 percent next month. According to the Independent Connecticut Petroleum Association, the increase in the tax will account for almost 26 cents per gallon. Add that to the state excise tax which is a flat 25 cents and the 18 cent federal gas tax and Connecticut’s taxes per gallon will be about 69 cents per gallon—higher than any of its neighboring states.
Blumenthalis pushing for a law that requires oil companies to provide the state with information about their pricing, allows cash discounts at the pump, and clarifies consumer laws surrounding the home heating fuel market.
Michael Fox of the Gasoline and Automotive Service Dealers of America said that motorists would see a 16 to 20 cent per gallon decrease in the per gallon price if retailers are able to offer cash discounts to consumers. He said the only company that has allowed its local station owners to give a cash discount is Hess, which operates just 13 gas stations in the state.
State Rep. William Tong, D-Stamford, said getting at the data from Big Oil companies “is not just an academic exercise.” He said the tax issue is different from the competition in the marketplace issue. He said lowering the state gas tax is nothing more than a gift to Big Oil. He said Big Oil would just eat through the tax after one week and increase their prices at the pump diminishing any decrease in state gas taxes.
Down in Washington D.C. two of Connecticut’s Congressmen have backed a proposal that would end market speculation on the price of oil.
U.S. Rep. John Larson, D-1, said Monday outside a Citgo gas station in Vernon that a bill which prohibits the participation of speculators in the oil futures market unless they are able to physically receive a delivery of oil, will be brought out on the floor of the House this week.
U.S. Rep. Joe Courtney, D-2, said he supports Larson’s legislation. He said last year the Ways and Means Committee held a hearing in which they attributed $20 to $30 per barrel to overpricing in the market based on speculation.
John Mitchell, of Mitchell Fuel in South Windsor said his company receives faxes throughout the day about the price of heating fuel. He said by the time his drivers leave in the morning to deliver fuel the price of the oil they’re delivering has already gone up 14 cents.
“We can’t as retailers keep up,” Mitchell said. “Our customers are having a difficult time also.”