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Wednesday, March 30, 2022

Gas Tax Holidays: Good Idea?

States around the U.S. are resorting to a gas tax holiday to lessen the impact of rising oil prices due to the foreign policy decisions levied by the west. Here are a few examples:
  • Maryland stepped up to suspend the gas tax for 30 days; net savings per gallon will be 36.1 cents
  • Georgia did the same until May 31, saving 29.1 cents a gallon
  • From April 1–June 30, Connecticut is reducing state gas tax by 25 cents a gallon
Many more states may follow.

And California, of course, has no desire to be outdone by any other state. Its governor is planning on an $11 billion package, not all of which is gasoline. $9 billion of the package will come in the form of sending $400 debit cards to registered vehicle owners.

While the move may save drivers around 30 cents per gallon at the pump, economic and policy experts warn that it is only a stop-gap solution.

"They may not lower [gas] consumption and they might increase it," Patrick De Haan, the head of petroleum analysis at gas price app GasBuddy, told ABC News of the tax holidays. "I would love to pay less at the pump too, but this is a Band-Aid solution."

The national average price for a gallon of regular gasoline is $4.24 as of March 25, according to AAA. Some states, particularly those on the West Coast, are seeing average prices of over $5 a gallon, AAA's data shows.

Last month, the national average price was $3.57 a gallon and a year ago, it was $2.87, according to the association.

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