Letter: We may not feel the effect of gas tax increase

Last modified: 3/4/2013 9:49:07 AM
Many people are concerned that raising the gas tax to increase highway funding will lead to higher gas prices at the pump. This may not be the case, and here’s why.

Gas prices vary across the state by more than 46 cents per gallon. That’s because our gas pricing is “market driven,” affected more by competition than the sum of fixed costs, like the gas tax.

Competition between your local filling stations is good, but when you look at this from state to state, New Hampshire consumers aren’t always getting their money’s worth.

New Hampshire has the lowest gas tax in the region. Vermont is 7 cents higher; Maine is 12 cents higher.

Our New Hampshire “advantage” isn’t always reflected at the pump because competition works both ways, meaning our gas prices can be marked up to be “competitive” with the stations over the state line. Essentially, many of us are already paying the value of a higher rate.

In fact, even though Maine has the higher rate of our neighbors, Maine’s average price today is less than Vermont, because Vermont’s prices are being influenced by New York’s “highest in the nation” 49-cent rate.

This is not an attack on capitalism. I’m simply pointing out that because of our continuous efforts to keep taxes low in New Hampshire, we have created an environment where the effects of competition are working against us with regard to gas pricing.

Consequently, the proposed increase to the gas tax should have little effect on pump prices long term, while providing much-needed funding to repair and maintain our aging infrastructure.




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