Retailers Fear No Actual Savings for Consumers
President Biden looks to suspend the 18.4 cent motor fuel tax for consumers while the price is predicted to increase even more due to supply chain constraints. Consumers may not see relief at the pump for months because refiners can’t keep up with demand during the peak summer season. Prices have been fluctuating from mere pennies to 30 cents in the span of 24 hours. The tightness of supply and wild fluctuation in wholesale prices make it impossible to tell how much of this ‘tax holiday ‘ will end up in the motorist’s pocket.
How the gas tax works: It is charged at the terminal before being shipped to a retailer. The retailer is sitting on thousands of gallons of gasoline in their tanks today, so a consumer won’t see an immediate reduction until the retailer orders new gas that hasn’t been assessed the motor fuel tax. And during the next 2-3 weeks, demand is expected to far outpace the supply of gas and that in turn will continue to cause the price to rise for retailers and consumers.
“The real solution to reduce these horrendous prices retailers and consumers are paying is to help refiners increase production. More gas equals lower cost for the retailer and consumer.” Ed Weglarz, President and CEO of MIRA