Cutting local option gas tax will not reduce price at the pumps

In January 2014, the local option gas tax increased four cents to provide a secure funding source for mass transit in Escambia County. Prior to then, Escambia County Area Transit was subsidized with property taxes.

On Jan. 1, 2014, the price of gas at the pumps didn’t go up four cents. Why? The economics of retail gasoline.

The pump prices are based primarily on whatever the competition is doing and the overall supply. Gas stations follow the local markets. With the higher tax, the retailers might not make as much money but the customers aren’t impacted.

Also a significant portion of the gas tax is paid by Santa Rosa County residents and others who work in or travel to Escambia County. The estimate may be as high as third of the local gas taxes collected.

This is why the Escambia Board of County Commissioners and county leaders promoted raising the local option gas tax.

What has happened to the retail gas prices since the four cents were added? According to that have dropped:

2013 $3.43/g
2014 $3.37/g
2015 $2.44/g
2016 $2.13/g
2017 $2.28/g

The most significant factors impacting gas prices this summer are “Venezuela situation, hurricane season and declining U.S. oil inventories,” according to Patrick DeHaan, senior petroleum analyst for GasBuddy.