Reasons for state’s lower gas tax not making its way to motorists remain murky

Delaware’s gas prices trickled down over the past week but not to the point that would indicate that the state’s motorists are seeing any significant benefit from the state’s lower fuel taxes.

The four-cent drop reported over the past week by AAA comes after reports of weaker demand for fuel as inflation climbs and interest rates rise.

Delaware’s average gas price

A recent report from AAA indicated that gasoline demand declined slightly. The slight drop in gas demand has helped to limit pump price increases. However, as crude oil prices remain volatile, the price per gallon for gasoline will likely remain elevated.

On Friday, crude oil prices fell to $110 a barrel after nearing $120.

AAA noted that crude oil prices have dropped along with the stock market over a slowdown in the economy as the Federal Reserve Open Market Committee approved an interest rate hike of .75%.

Crude prices also decreased after the Energy Information Administration reported that total domestic stocks increased by 1.9 million bbl to 418.7 million bbl. Still, the current storage level is approximately 10 percent lower than a year ago.

In the Mid-Atlantic region, oil prices may also be affected by lower refining capacity, due to the closure a few years ago of the region’s largest refinery in Philadelphia.

Gasoline prices in Delaware are only a few cents below the national average after being well below the national numbers in past years.

Delaware also has the lowest gas tax in the region. However, motorists do see much of an impact at the pump. Reasons for the state’s lower gas tax not making its way to motorists remain unclear.

Despite having a gas tax that is 36 cents a gallon higher than in Delaware, the price at the pump in Pennsylvania less than a dime higher than in Delaware, with Maryland pump prices nearly matching those of the First State despite its higher gas tax. (See AAA’s ranking below and a comparison of prices at the pump vs. fuel taxes.)

To check out gas prices in your neighborhood, log on to AAA’s Fuel Price Finder.

The online tool shows gas prices as low as $4.80 a gallon at the Costco near Christiana Mall, east of Newark, with prices below $4.90 a gallon at some stations elsewhere in the state.

Gas prices by state from AAA