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Virginia gas prices could drop by close to six cents per gallon after July 1 — at least theoretically — says the American Automobile Association.
A historic change to the Virginia gas tax could place Virginia in the coveted five most-affordable states in which to fill up, AAA said.
After July 1 with implementation of Gov. McDonnell’s transportation funding plan, Virginia retail gas prices should begin to drop by about six cents per gallon as the retail gas tax is replaced with lower tax at the wholesale level.
In contrast to the current 17.5 cents per gallon tax, The Virginia Petroleum, Convenience and Grocery Association estimates Virginia motorists will end up paying a total of 11.7 cents in taxes and fees for a gallon of gasoline through the end of the year. (The figure includes the Virginia Petroleum Storage Tank Fee of six tenths of a cent).
The difference could go to Virginia motorists, AAA said.
“AAA urges the petroleum industry to pass gas tax reductions on to the consumer and not exploit the situation as an opportunity to increase profits,” said Martha Mitchell Meade of AAA.
In 2012, six of the ten most profitable companies worldwide were petroleum companies, leaving some consumers skeptical.
“Motorists should not, however, expect an immediate impact or an exact six cents reduction per gallon, as the gas in the tanks on July 1 was paid for under the current gas tax structure and fluctuations in the daily price of gas must be taken into consideration,” Meade added.
Just how low will gas prices go? Soon Virginia motorists may find themselves in one of the five most affordable states in which to fill up.
The average for a gallon of self-serve regular gas in Virginia on June 17 was $3.40. Theoretically, if that price dropped by six cents, the current adjusted price would be $3.34 and make Virginia the fourth most affordable state in the nation to purchase gas.
Only Mississippi, Alabama and South Carolina would come in lower in that scenario. Today, Virginia sits in the number seven spot, with six states boasting lower gas prices.
Gasoline prices are heading in a different direction in neighboring Maryland, however, as a result of new motor fuel tax laws that go into effect July 1.
Virginia’s historic fuel tax policy transformation should give consumers just shy of a dollar more in their bank accounts with each fill up.
The cost of gasoline in Maryland will likely increase by 3.5 cents or so a gallon in the early stages of its new gas tax plan (or about 53 cents per fill up).