Three dollar gas could be coming back soon (at some stations, it's already here), but the state of California is pondering a 7.5 cents per gallon tax cut.
That's good news.
This dreamy winter of low gas prices we've been having could be coming to an end. Oil producing nations have kept their output healthy, but wholesale prices are inching up. The Auto Club of Southern California said last week that the average cost of a gallon statewide was $2.712, 18.5 cents more than last week and a 30 cent “leap” from two weeks ago.
“Local gas prices have risen by 30 cents or more as wholesale prices rocketed back to their levels of late November and early December, when average pump prices were $3.15 to $3.20 a gallon,” said Auto Club spokesman Jeffrey Spring. “Another week of increases like this one would bring average prices back over $3 a gallon.”
And then there's the annual switch to summer blend, which has to take place by May 1. Summer blend, produced to reduce harmful emissions, costs only a few cents per gallon more.
But the switch can also produce shortages as refineries try to sell out of the winter stock they have on hand. That can squeeze up prices even further at a time when we're starting to take more weekend trips and vacations, driving up demand for fuel.
The California Board of Equalization, which regulates all things tax-related in the Golden State, says it will consider the 7.5 cent cut at its Feb. 24 meeting in Culver City.
The board is required to adjust this tax every year. If it approves the cut, the state's per gallon excise tax would go from the current rate of 36 cents to 28.5 cents.
Given the certainty of climbing gas prices, we'll take it. The board, however, says there's no guarantee a cut would reduce overall prices at the pump.