Motorists stung by high fuel prices could soon see relief, but not as soon as many hope.
The Georgia General Assembly unanimously passed House Bill 304 to suspend the state 29.1 cent-per-gallon gas tax through May 31. Gov. Brian Kemp on Friday signed the bill into law.
That would save about $4.37 per fill-up for a driver putting 15 gallons into a gas tank
But prices at the pump won’t necessarily plummet immediately.
Motor fuel taxes are excise taxes on distributors, rather than sales taxes on consumers. So the suspension means fuel distributors that supply gas stations will stop collecting the tax.
Any fuel that gas stations already had before the fuel tax suspension took effect is fuel they’ve already paid the tax on. And gas they ordered before the fuel tax suspension took effect is also taxed.
“It’s not an immediate relief,” said Montrae Waiters, spokeswoman for AAA.
The dates when the untaxed fuel will reach pumps will vary for each gas station, according to Georgia Association of Convenience Stores president Angela Holland.
“It depends on the last time they ordered fuel, how much fuel they have in the ground, when they order fuel again, when they have deliveries again,” Holland said.
If a station fails to pass the tax cuts along to consumers, the state could use its price-gouging statute to impose fines of up to $15,000. Georgia consumers can report suspected price gouging online through the state Consumer Protection Division’s website.
The last time Georgia’s fuel tax was temporarily suspended was last May after the shutdown of the Colonial fuel Pipeline.
Even with the suspension of the state fuel tax, there is still significant volatility underlying gas prices.
Gas prices were already rising in 2021 with more people venturing out as COVID-19 vaccines became widespread. Then, prices climbed higher last month after Russia invaded Ukraine, and this month after the U.S. and other nations banned Russian oil.
Gas prices reached record highs last week, hitting $4.33 a gallon on average in metro Atlanta, according to GasBuddy.com. That had abated to about $4.26 a gallon by Friday afternoon — down about 6 cents from the peak but still significantly higher than the $3.33 a gallon seen in mid-February.
The price of crude oil makes up nearly half of gas prices, according to Waiters.
Crude oil prices hit more than $130 a barrel last week, before falling back to below $100 earlier this week. On Friday afternoon, crude oil had crept back up to about $107 a barrel.
“Not only are we dealing with the crude oil starting to increase again but also the issue of what’s going on in Ukraine,” Waiters said. “With both situations being so fluid... we can’t predict when gas prices will come down again.”
The state fuel tax suspension until the end of May would save drivers more than $300 million, based on last year’s collections. Kemp said state surplus funds will make up for lost revenue.
If gas prices remain high, the governor could extend the state fuel tax suspension.
Separately, Democratic U.S. Sen. Raphael Warnock of Georgia on Feb. 9 sponsored a bill to suspend the 18.4 cent-per-gallon federal gas tax until Jan. 1, 2023, saying in a statement that “every penny counts” for people being squeezed at the pump.
In signing HB 304, Kemp, like other Republicans at the Capitol, put most of the blame for high gas prices on the Democratic Biden administration.
“We can’t fix everything Washington has broken, but we are doing our part to lesson the impact on your wallet,” he said in a video message.
The AJC’s James Salzer contributed to this article.
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