As a recently-passed gas tax holiday went into effect Friday, Gov. Ned Lamont pressed Connecticut gas stations to immediately pass the resulting savings on to consumers despite warnings from fuel sellers that the discounts may be delayed.
Lamont marked the first day of a three-month suspension of the state’s 25 cent-per-gallon excise tax on gasoline with a ceremonial bill-signing event across the street from a gas station in Hartford.
“Connecticut families are getting slammed by inflation, especially at the pump and while 47 other states are still studying what to do about it, as of right now working on a bipartisan basis, a 25 cent cut in your taxes,” Lamont said. “That will make a difference.”
The bill, which also includes free bus service and a limited sales tax holiday later this month, was fast-tracked through the legislature by both parties last week and the governor was joined by East Lyme Republican Sen. Paul Formica and Guilford Democrat Rep. Sean Scanlon for Friday’s event.
But while the gas tax respite has resulted in bipartisan cooperation, it has caused friction between policymakers and gas station owners across the state. Ahead of the bill’s passage last week, the Connecticut Energy Marketers Association pushed unsuccessfully for a rebate for taxes paid on fuel already in their inventories and warned that prices may remain high until gas stations deplete their reserves of already-taxed gasoline.
Lamont seemed to have little patience for the argument when asked Friday, saying he expected gas stations to offer the discounts immediately.
“It should be right now,” the governor said. “We passed this bill a week ago. We wanted to give our gas station operators a week, drain down their reserves, buy in new wholesale gas with a 25 cent tax cut, and hopefully that’s going to be passed along to voters right now.”
“If it’s not getting passed along, you’ll probably hear from [Attorney General] William Tong,” Lamont said.
Tong’s office released guidance Friday morning on how consumers can report gas stations they suspect are withholding savings. The office plans to investigate claims against gas station owners, who could face civil penalties if the state determines they charged for the tax.
“Any retailer suspected of charging this tax or a portion of this tax will be investigated and subject to penalties under the Connecticut Unfair Trade Practices Act,” Tong said. “It’s important to remember that prices at the pump will continue to fluctuate along with changes in wholesale prices. Not every increase, or decrease, in gasoline prices is related to the $.25 tax or constitutes price gouging.”
Chris Herb, president of the Connecticut Energy Marketers Association, said the pressure exerted by state policymakers had many gas station owners preparing to absorb hefty losses in order to avoid being accused of price gouging.
“It doesn’t seem like the governor or many people in decision-making positions recognize that today there will be a number of gasoline station owners who will lose thousands and tens of thousands and hundreds of thousands of dollars,” Herb said. “Two members today told me they have more than a quarter million dollars worth of taxed inventory that they were going to have to eat because they didn’t want to be unfairly prosecuted.”
During Friday’s press conference, Lamont said the impact of the tax holiday may vary depending on the inventories of the gas stations. He said the market would likely dictate how gas station owners handle the savings.
“Some may do more, some may do less. They’ve got to decide that for themselves,” Lamont said. “But I’ll be going to a gas station that cuts the gas tax.”
The tax holiday comes as Lamont and many lawmakers prepare to run for re-election in November. In addition to the governor’s usual staff, a film crew attended Friday’s press conference to gather footage for campaign use.
Lamont, whose campaign launched its first television commercial this week, acknowledged he was transitioning into campaign mode as his likely Republican opponent, Bob Stefanowski, had been advertising on the airwaves for weeks.
“Look, I wanted to get through the session, but obviously the politics is kicking up,” Lamont said. “My opponent’s been on TV for months now.”