Pump prices will

likely stay in

$3 range for now
By Scott Nicholson
nicholson@wataugademocrat.com

Rising prices at the pump have pushed the state’s gasoline tax to “full” and consumers can expect gas to stay in the $3-and-up territory for the rest of the year.

With wholesale oil prices reaching $100 a barrel for the first time, local prices are making their push well past $3 a gallon for unleaded regular. Just before Christmas, AAA Carolinas reported the state’s average price for a gallon of gasoline was $2.95 with the lowest metropolitan average found in Wilmington at $2.91. Boone had the highest average of $3.031 for a gallon of regular, unleaded gasoline.

AAA spokesman Tom Crosby said on Friday statewide gas prices for regular had risen to $3.064 per gallon and had increased two-and-a-half cents in one day. That’s an overall price increase of a nickel from a month ago.
One year ago, the state average for regular unleaded was $2.29 a gallon.

“We’re going to continue to see gas prices in the $3 range,” Crosby said, despite a recent dip in wholesale prices.

“The mountains will see a greater price fluctuation because of home heating oil. The market’s going to continue to fluctuate and it will stay $3 and well above $3 for the rest of the year.”

The gas tax also rose to 30.15 cents per gallon this month, one of the highest in the nation. The tax rate is based on the average wholesale price and is adjusted quarterly. The base tax is 17 cents a gallon and the remainder is based on a percentage of the product price and is capped at 7 percent. There’s also a quarter-cent tax on each gallon to cover fuel inspection fees.

N.C. Rep. Cullie Tarleton (D-93) said last year Gov. Mike Easley and the General Assembly agreed to cap the gas tax in recognition of the effect pump prices were having on consumers.

“We wanted to say to people that we’re aware of what’s going on, and while we can’t really control the price, we can move to try to assist the consumer.”

Tarleton said a 21st Century Transportation Committee would be making recommendations this year, which could include a permanent gas cap tax or other measures. However, that doesn’t mean it will pass, though some legislators are already moving to support such cuts or freezes.

Tarleton said the tax had to be balanced with the need for highway improvement funds.

“On the one hand, we need to help keep gas prices down, but that means fewer dollars in the highway trust fund,” he said.

“That means less money for roads and bridges, and we’ve all seen the infrastructure needs.”

Tarleton said some reports had projected gasoline reaching $4 a gallon by summer, which he said would have a significant impact on consumers and affect other areas of the economy.