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As Tax Resumes, Gas Prices to Leap

Posted on: Thursday, 29 September 2005, 18:01 CDT

By The Atlanta Journal-Constitution

Sep. 29--Get ready to start paying around $3 per gallon for gasoline again, perhaps as soon as this weekend. And possibly even more in another month.

That's because state gas taxes worth about 15 cents a gallon go back on fuel Saturday, when the state's motor fuel tax suspension expires.

And starting Nov. 1, motorists will likely be paying a few cents on top of that when a higher state gas tax goes into effect.

Georgians have enjoyed a nearly monthlong break from gas taxes since Sept. 2, when Gov. Sonny Perdue ordered the suspension of tax collections after fuel prices soared in response to damage to Gulf pipelines caused by Hurricane Katrina.

Beginning at midnight Saturday morning, the taxes on gas return. Perdue, whose tax suspension was ratified by the Legislature, has said he will not extend it because the $75 million monthly cost is prohibitive.

However, state Revenue Commissioner Bart Graham said many stations shouldn't be charging the taxes this weekend. If stations are selling gas they bought before midnight Friday --- gas they didn't pay taxes on --- he said they shouldn't be passing the taxes on to consumers.

"We will be watching," said Graham, whose office investigated price-gouging complaints earlier this month, turning evidence over to the Office of Consumer Affairs for possible fines. "If it's that blatant, that there's a 15-30 cent increase, we'll start investigating."

Graham urged consumers to call his office, at 404-417-2100, if they see prices shoot way up over the weekend.

After Katrina, some metro Atlanta stations were charging $4 to $5 or more a gallon. Perdue's order was supposed to save Georgians about 15 cents per gallon.

However, many stations didn't immediately cut prices to reflect the 15 cents a gallon tax, arguing that they had already paid taxes on the fuel they were selling. Graham expects those same stations to sell gas at a price that doesn't reflect the tax until they get new shipments. He said most, if not all, stations will be charging the extra 15 cents by next week.

Mike Thornbrugh, manager of public and governmental affairs at QuikTrip, said the company's stations will be adding the taxes onto prices right away. "When the gas tax goes back on, at one second after midnight, we will be obligated by state law to collect the state tax."

That isn't the only increase on the horizon.

Generally every six months, Graham recalculates a portion of the gas tax based on what is expected to be the average selling price. In the next few days, Graham will recalculate that portion of the gas tax. Prices have shot up almost $1 a gallon since the last calculation was done. So Graham's recalculation will probably mean another three to five cents will be added onto the tax starting in November.

With gasoline production still hindered by storm damage, the price already has been rising. The cost for a gallon of regular unleaded Wednesday in Atlanta was $2.85, up from $2.56 a week ago, according to AtlantaGasPrices.com.

Perdue's office has been warning of potential shortages over the next few days, and some stations may be running out, which could drive up prices at stations that have fuel.

Staff writer Michael E. Kanell contributed to this article.

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Copyright (c) 2005, The Atlanta Journal-Constitution

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Source: The Atlanta Journal and Constitution

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