Our view: The effective price at the gas pump

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Hello everyone,

As readers of this column may know, I have been a longtime skeptic of Delaware gas prices.

One newsletter subscriber offered a great suggestion after looking at our weekly listing of average gas prices from AAA Mid-Atlantic.

“Wouldn’t it be a better comparison in chart form to show the average retail gas prices in Delaware, PA, MD & NJ and then subtract each state’s respective tax to be able to compare the effective net prices,” he wrote.

I ran with the suggestion and came up with the following based on recent average prices and state gas taxes. The federal gas tax of 18.3 cents a gallon hasn’t changed since the days of jumbo-sized cellphones.. 

  • Maryland: Average price, $3.03; State tax, .36; Effective price, $2.67.
  • Delaware: Average price, $3.05; State tax, .23, Effective price, $2.82
  • Pennsylvania: Average price, $3.25; State tax, .74; Effective price, $2.51
  • South Jersey: Average price, $3.13; State tax, .51; Effective price, $2.62.

The calculations appear to indicate that drivers in Delaware pay more at the pump to the wholesale-retail-refiner middlemen than their counterparts in other states.

The numbers also seem to indicate that high gas taxes lead to retailers and wholesalers trimming their margins.

This could mean that financing part of the proposed infrastructure bill by adding a dime a gallon to the gas tax would not fall entirely on motorists. (Like the tax on electric vehicles proposed by some Republicans, the gas tax is dead in the water, with the Biden Administration rejecting any increase).

Reasons for the Delaware disparity remain unclear. 

Convenience store chains state that gas margins are low, especially when wholesale prices go up.

Our current attorney general Kathy Jennings has been more active on consumer protection than her predecessors.  The gas disparity cries out for a closer look. – Doug Rainey, chief content officer

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