Will gasoline prices go up, down or stay the same when provisions of Pennsylvania's new transportation law kick in on New Year's Day?
House Bill 1060 signed into law by Gov. Tom Corbett on Nov. 25, will raise an additional $2.3 billion to $2.4 billion into transportation by the fifth year of the plan. Partial funding for the new transportation package is being derived from the elimination of the flat 12-cent gas tax and uncapping of the Oil Company Franchise Tax, a tax levied by the state on wholesale oil distributors based on the wholesale price of gasoline.
By gradually eliminating the cap of $1.25, which was put in place in the early 1980s, Pennsylvania expects to realize approximately $1.8 billion in additional revenue by the fifth year of the plan.
Mirror photo by Gary M. Baranec
Sheetz customers will have to wait and see whether they’ll have to pay more at the pumps starting Jan. 1, executive Louie Sheetz said.
The wholesale price of gas reached the $1.25 ceiling in 2006, so funding from the OCFT has not grown since. The cap for 2014 is being raised to $1.87.
"We anticipate that the change will equal approximately 9 cents per gallon. However, the tax is paid at the wholesale level, and it remains to be seen how much will be passed on to consumers when the change takes effect Jan. 1," said PennDOT information specialist Jamie Legenos.
Brian Kustaborder, commercial sales director at Martin Oil Co., Bellwood, said the increase will likely be passed on to customers.
"It is my opinion you will see about a 9 cent increase at the pump for gasoline and about a 12.9 cent per gallon increase in diesel," Kustaborder said.
"I don't see any other choice; the margins are tight to begin with. Unfortunately it will be passed on to the consumers. It will have a ripple down effect. Common sense tells me this has to be passed on whether it is on Jan. 1 or shortly after the first of the year."
Customers of Sheetz Inc., which supplies fuel to the 236 convenience stores it owns in Pennsylvania, will have to wait and see.
"What it will do to our cost we don't know. We haven't made a decision. If it goes up 9 cents, will it go up 9 cents on the street? It is a possibility but not necessarily likely," said Louie Sheetz, executive vice president for marketing. "Eventually if there is a fuel increase at the wholesale level, it has to get carried through at the retail level."
"Our margins are extremely minimal with gasoline, and any increase in cost, like any other product, ultimately gets passed on in the retail price," Sheetz spokeswoman Monica Jones said previously.
Mirror Staff Writer Walt Frank is at 946-7467.