Petroleum prices around the world are off the charts thanks to the Russian invasion of Ukraine, and drivers and truckers across New York are feeling the pain passed onto them every time they gas up.
The American Automobile Association (AAA) reported that average prices for a gallon of regular octane gasoline in New York City on Tuesday had climbed to an all-time high on Wednesday of $4.463 cents, up more 6 1/2 cents in just 24 hours. Diesel prices were even worse, at $5.159 a gallon on Tuesday, hovering just under the record high of $5.263 set back in July 2008.
Those prices are likely to keep on climbing after President Joe Biden announced Tuesday a full embargo on Russian oil and natural gas. Only about 8% of the country’s imported petroleum comes from Russia, but subtracting that will increase the U.S. dependence on other sources domestically and around the globe.
Motorists are clamoring for relief from the higher prices, with one upstate lawmaker — Assemblyman Angelo Santabarbara, a Democrat from Schenectady — calling for the state’s gasoline tax to be temporarily suspended. Another upstate lawmaker, Republican state Senator Peter Oberacker of Rochester, introduced legislation to uphold the gas tax until September.
Asked on Tuesday about whether she’d support a gasoline tax suspension, Governor Kathy Hochul indicated that she would consider such a proposal, though she expressed doubts about how effective it would be at lowering prices. She’s particularly concerned that suspending the gasoline tax would provide actual savings to consumers, as it remains unclear just how much higher fuel prices will go amid the Ukraine crisis.
“So, if you’re willing to ensure, if you can ensure that that money is actually going to end up in the pockets of consumers, it has my attention,” she said. “I don’t have any way to guarantee that the savings from not having to pay 10 cents or 18 cents or 20 cents per gallon is going to end up in the consumer’s pockets, if it’s going to be absorbed in those few increases. So I’m being very thoughtful about this.”
When a driver buys a gallon of gasoline, they’re paying 46.19 cents of that cost to New York state and another 18.4 cents to the federal government. Those buying a gallon of diesel fuel pay a state sales tax of 44.64 cents and a federal tax of 24.46 cents which, like the gasoline tax, is included in the gallon price.
Without the state sales tax, the average cost of gasoline in New York City, as of Wednesday, would hover at about $4 per gallon. The cost of a gallon of diesel would be back below the $5 mark without the 44.64 cent state sales tax.
The state’s gasoline tax is used primarily to fund road repairs and improvements to public transportation. Hochul said she wants to ensure that suspending the gas tax would not negatively draw away funding from those endeavors.
“Believe me, I’m taking this seriously,” the governor said. “[But] I want to make sure that we have guarantee that the consumers are actually going to benefit from this, as opposed to us just trying to have to figure out how to plug a hole of $1.2 billion or $500 million, depending on the different sources. So it’s very much top of mind for me, but it’s not as simple as the answer as one might think.”
In the meantime, New York state is looking to combat price gouging at the pumps, according to state Attorney General Letitia James.
“This newest round of sanctions could impact New Yorkers, so we are reminding companies that price gouging is illegal and ensuring that consumers take precautions to protect themselves and their wallets,” James said in regard to the new Russia oil ban. “Anyone who has experienced issues relating the price gouging of fuel should contact my office, and we will continue to do everything in our power to protect consumers.”
Click here to report any suspected price gougers.