Sheetz Backs PA Fuel-Tax Change

Law moves cost from pumps to the rack

Published in CSP Daily News

Sheetz Backs PA Fuel Tax Change

ALTOONA, Pa. -- Sheetz convenience stores has expressed its support of a Pennsylvania bill that will replace the state's 12-cents-per-gallon retail fuel tax with an increase to the state's Oil Company Franchise Tax, essentially moving the gasoline and diesel charge to the wholesale level or “at the rack.”

“Sheetz commends Gov. Tom Corbett and the General Assembly for the recently enacted, bipartisan transportation funding legislation, which will provide a much needed financial source for infrastructure improvements across the commonwealth,” Sheetz said in a statement.

“While removal of the oil-company-franchise cap is one reason that retail costs could increase, there are other components of this legislation that could decrease those costs, including the elimination of the 12-cent liquid fuels tax that consumers pay at the pump.”

The legislation, which takes effect on Jan. 1, 2014, will benefit Pennsylvania motorists, according to Sheetz.

“The lack of funding available for repairs on Pennsylvania roads and bridges has taken a significant toll on [Pennsylvania] drivers, including our customers, our employees and the many trucks that serve our 464 stores throughout the commonwealth and the other five states in which we operate,” the company stated. “Act 89 provides for a comprehensive investment in transportation that will make our road system safe and efficient, stimulate the state's economy, and improve the quality of life for both our employees and customers.”

Under the current formula used to calculate the OCFT tax, an artificial cap of $1.25 was applied in 1983, effectively suppressing revenues and the ability for the current wholesale price to be used when calculating the tax rates, according to state documents. The law uncaps the OCFT over a five-year period as follows:

  • Increases the cap to $1.87 on Jan. 1, 2014.
  • Increases the cap to $2.49 on Jan. 1, 2015.
  • Eliminates the entire cap on Jan. 1, 2017.
  • A new “floor price” is established at $2.99 on Jan. 1, 2017, to protect the state from any sharp declines in price.

The five-year phase out of the OCFT is estimated to generate an additional $1.85 billion annually, according to the bill.

Established in 1952 in Altoona, Pa., Sheetz Inc. is one of America's fastest growing family-owned and operated convenience store chains, with more than $6.6 billion in revenue for 2013 and more than 15,500 employees. The company operates 464 convenience locations throughout Pennsylvania, West Virginia, Maryland, Virginia, Ohio and North Carolina.

Keywords: 
fuel prices, taxes