Gas tax increases by a few cents
Published 8:30 am Wednesday, July 6, 2022
On July 1, a gas tax took effect that will have Virginia residents paying a few cents more at the pump.
This gas tax raises the existing tax another 7%, adding about 3 cents per gallon. However, Virginians may not see this happen immediately.
“This is not always something you see overnight,” said Morgan Dean, spokesperson for AAA. “Sometimes it takes a couple of days if people see it at all with how gas prices have been violently fluctuating. We might not see the impact as much as other time periods.”
According to AAA, the gas price average for Virginia on July 1 is $4.65. This is down 21 cents from the record high set on June 14, down 10 cents from last week, up 18 cents from last month and up $1.72 from this day in 2021. This tax comes right before the Fourth of July holiday when AAA predicts 47.9 million people will travel with higher levels of travel by automobile than air than in past years.
According to the Virginia Legislative Information System, Former Gov. Ralph Northam signed HB 1414 in 2020 that a tax rate of 26.2 cents per gallon of gasoline would be phased in over the next two years and then adjusted in the following years for inflation.
According to Dean, on July 1, 2021, the gas tax increased by 5 cents. The small increase was seen slowly over a long period as the price only rose a penny over 11 days making the new tax almost unnoticeable.
“Many things go into the makeup of the price of a gallon of gas at the pumps,” said Dean. “The price of crude oil is the largest part…state taxes, make up a much smaller piece of the pie.”
According to the U.S. Energy Information Administration, in May 2022, with the gas price of $4.44 per gallon, 59% of the cost covers crude oil, 26% covers refining, 5% covers distribution and marketing while only 11% is due to taxes.