CT could suspend 25-cent gas tax to ease soaring fuel prices
The last time Connecticut suspended the fuel tax was 2022 after Russia invaded Ukraine. That "gas tax holiday" lasted for nine months.
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As gas prices soar over the war in Iran, Gov. Ned Lamont on Tuesday suggested temporarily suspending Connecticut’s state gas tax.
Drivers could save 25 cents per gallon, and truckers could save 49 cents if the diesel tax is also paused.
Prices skyrocket
At the Orange service plaza along Merritt Parkway, drivers are racing to fill up before gas gets even more expensive.
Rudy Gibilante got there just minutes before workers raised the price another 18 cents.
“I think it’s outrageous,” he said. “I can’t wait for it to start coming down again.”
Statewide, unleaded gas now averages $3.45 a gallon, according to AAA. The national average jumped to $3.54 on Tuesday.
Gas tax holiday?
To ease the pain, Lamont wants to offer drivers a “gas tax holiday” until oil markets stabilize.
“If you're doing, you know, 20 gallons a week, that would maybe save you five bucks,” the governor said. “And you do that over a month, that saves you 20 bucks.”
With conflicting statements from the Trump administration, Lamont said it’s impossible to predict how long the Iran invasion will last.
“Hopefully it’s for a month,” he told reporters. “Hopefully it’s not for a longer period of time than that, but I’ll sit down with the legislature and see if that's something they want to prioritize.”
Last time was 2022
Connecticut last suspended the gas tax in April 2022 after Russia attacked Ukraine. At the time, fuel prices surged toward $4 a gallon.
The tax cut did not include diesel fuel.
That holiday lasted nine months, then the tax was phased back in. Fuel oil companies think this price spike will be a lot shorter.
“I truly think this will be short-term,” said Katie Childs, owner of Tuxis-Ohr's Fuel in Meriden. “There’s not the supply issues that we had last time around.”
On Tuesday, crude oil prices retreated to $83 a barrel after peaking at $120 for a period on Monday.
“It was just jaw-dropping,” said Chris Herb, head of the Connecticut Energy Marketers Association.
Herb blamed oil speculators for the wild fluctuations.
“The simple answer is fear,” he said. “A bunch of 25-year-old Wharton [Business School] graduates on Wall Street are afraid that this could ultimately impact supply here in Connecticut.”
Emergency bill
State lawmakers would have to approve a gas tax suspension in an emergency vote.
The idea is gaining bipartisan support, but could come with strings attached.
“The Governor’s idea is something we are certainly willing to explore further,” Connecticut House Speaker Matt Ritter (D-Hartford) said in a statement. “The goal for our caucus with the funding the Governor outlined in his budget proposal is to directly impact affordability. For our members, that would include lowering property taxes and increasing funding for local education.”
Lamont suggested the gas tax suspension could be offset by reducing the $200 rebate checks he proposed in his new state budget. He estimated the cost at $30 million a month, plus an additional $10 million for the diesel tax.
Republicans want to go even further.
“I would like to see a permanent cap,” said House GOP leader Vin Candelora (R-North Branford). “Say you reach $3. You don’t collect any tax on anything above $3, so it’s capped.”
Others question if gas tax holidays even work.
“The research is not very good on whether they provide relief to families. That’s why we need permanent relief,” said state Sen. Ryan Fazio (R-Greenwich), one of three Republicans challenging Lamont for governor this year.
Drivers react
So what do drivers think?
“I like that,” Gibilante said. “I'll take it, yeah.”
But others think Connecticut should wait.
“I think it might be too soon. I would give it a couple of months,” said Terri Gigliotti, of Canton, Mass. “Not that this is World War II or anything, but, you know, we had more stamina for this kind of thing. We're very impatient.”
