States Floating Gas Price, Tax Plans

Published in CSP Daily News

Mo. lawmaker says stations should warn customers about price increases

Ray Weter

ST. LOUIS -- A Missouri lawmaker said motorists should get an alert when there is a price increase at the gas pump, reported KMOV-TV.

State lawmakers are considering a proposal from State Representative Ray Weter (R) that would require gas stations to tell customers before it raises the price of gasoline.

The proposal requires that the oil companies tell the gas stations. The gas stations must tell the customer by posting a sign 24 hours ahead of the increase.

The Missouri legislation is one of several creative, "angst-inspired" proposals being floated in state capitols as lawmakers look for ways to provide election-year relief from gasoline prices that are nearing a national average of almost $4 a gallon, the report said. One South Carolina lawmaker is proposing to cap gasoline prices, while officials in some other states want to cut gasoline taxes.

Missouri's proposal, which received a hearing Tuesday in a House committee, would not prevent prices from going up, but would at least help families plan when to purchase, said Weter.

"Everybody talks about [gas prices], but nobody does anything about them," he said. "I think I could do a little bit of something about them."

Connecticut Governor Dannel Malloy signed a measure Tuesday that caps the state's tax on the wholesale price of gasoline, a move that is projected to save consumers one or two cents on each gallon they buy. But motorists there should not expect to see lower prices at the pump any time soon.

Eugene Guilford, president of the Independent Connecticut Petroleum Association, told KMOV that the average wholesale price of regular gasoline in the state jumped 6.6 cents per gallon from Monday to Tuesday. That would erase the expected 1.7 cents-per-gallon benefit from capping the gross receipts tax when wholesale prices hit $3 a gallon.

"I think it's important for state governments to be responsible and not be piling on consumers with Big Oil," said State Rep. Joe Taborsak (D). "It's probably not as much relief as some people would like, but it does help."

In South Carolina, State Sen. Dick Elliott (D) has filed legislation that would cap prices at the level they were at June 1, 2011, until June 2012. The average retail price of gasoline in South Carolina was about $3.48 per gallon in June 2011. As of Tuesday, it was about $3.66 per gallon.

The measure has not been debated in the state's heavily-Republican Legislature, and oil advocates say the state measures could result in shortages in some areas without putting a dent in prices.

John Felmy, chief economist for the American Petroleum Institute (API), said posting advance notice of price increases would motivate most people to purchase their gasoline the day before. And if lawmakers capped the price of gasoline somewhere, oil companies might decide to simply sell elsewhere where market prices are higher.

"Price controls don't work," he told the news outlet. "Whether it's wholesale or retail, if the market's not allowed to work, what you're going to do is cause panic."

Hawaii did enact caps on the wholesale price of gasoline in 2005. But the caps were repealed the next year after the state found that island drivers were actually paying more than that they would have, because gas stations were charging the maximum amount allowed under the caps instead of the market price of the fuel.

Other state governments are looking at reducing their share of the cost of a gallon of gasoline.

Alaska Governor Sean Parnell has been pushing for a two-year suspension of the state's eight-cents-per-gallon gasoline tax, but that idea has stalled, with critics saying the tax provides much-needed cash for roads.

But many critics and economists say there is actual very little, if anything, lawmakers can do to put a real dent in gasoline prices, said the report.