Contact:  Gene Guilford gene@icpa.org or Chris Herb chris@icpa.org
For Immediate Release  April 3, 2012

GOVERNOR SIGNS GAS TAX CAP BILL

Does it make a difference in gas prices ...

[Cromwell, CT] Today Governor Malloy signed the legislation aimed at restraining the increases in the Connecticut gross receipts tax when wholesale gasoline prices rise. 
 
As we said last week in our analysis of the legislation as it was poised for passage, see http://www.icpa.org/press/Press_2012/press_3_28_12.htm the immediate impact on gasoline prices, assuming wholesale prices remained level, would be minimal, or about 1.7c per gallon. The primary advantage in the new law would be restraining the increases in Connecticut's petroleum gross receipts tax as the tax is "capped" at $3.00 per gallon [7.53% is the tax rate x 3.00, or capped at 22.59c per gallon]
 
Here is the average wholesale price of regular gasoline in the state's largest wholesale supply point, New Haven harbor, over the last few days:
 
4/2/2012    $3.2958
 
4/1/2012    $3.2289
 
You see the average wholesale price of regular gasoline went up by 6.6c per gallon just last night. Retailers will be paying 6.6c a gallon more, on average, for their deliveries beginning today.  Yesterday, the gross receipts tax yielded 24.31c per gallon [.0753 x 3.2289] and if capped today at $3.00, would yield 22.59c per gallon, or a difference of 1.7c per gallon. Yet, the wholesale price paid by local retailers went UP by 6.6c on average, effectively wiping out the benefit of the decrease in the tax.
 
The best we can say today is that the price of wholesale gasoline will not increase by 1.7c and 6.6c together, as CT will not impose the additional 1.7c tax beginning tomorrow.

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ICPA represents more than 576 Connecticut based independent businesses. These businesses serve more than 680,000 heating fuels consumers, employ 13,000 Connecticut citizens at the majority of our state's 1,400 motor fuels outlets and 600 heating fuels retailers. ICPA's offices are at 10 Alcap Ridge, Cromwell, CT  06416.  For more information about today's Press Release, contact Gene Guilford or Chris Herb.