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AAA: despite gas tax holiday, gas prices rise statewide due to increase in oil prices

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Posted at 3:43 PM, Jun 09, 2022
and last updated 2022-06-09 15:43:56-04

BUFFALO, N.Y. (WKBW) — According to AAA Western and Central New York, despite the New York State gas tax holiday, gas prices have risen statewide due to an increase in oil prices.

The state's gas tax holiday went into place on June 1. As part of the gas tax holiday, the state is suspending the sales and excise taxes on each gallon of gas through the end of the year. Counties have also followed the state's lead and will suspend or cap gas taxes at the county level. In Erie County, motorists will not be taxed on any gallon of fuel beyond the first $2. In Niagara, Cattaraugus and Chautauqua Counties, taxes will be capped after $3 per gallon.

Statetwide the average price for a gallon of gas dropped initially due to the gas tax holiday but is now on the rise as AAA said oil prices continue to increase.

  • New York State - $5.01 (up 13 cents since Monday)
  • Batavia - $4.90 (up 15 cents since Monday)
  • Buffalo - $4.89 (up 17 cents since Monday)
  • Elmira - $4.97 (up 19 cents since Monday)
  • Ithaca - $4.96 (up 17 cents since Monday)
  • Rochester - $4.95 (up 16 cents since Monday)
  • Rome - $4.96 (up 17 cents since Monday)
  • Syracuse - $4.94 (up 20 cents since Monday)
  • Watertown - $4.94 (up 14 cents since Monday)

According to AAA, oil prices range from $121 to $123 per barrel, which is up from $120 per barrel on Monday.

AAA said oil accounts for at least half of each gallon of gas and gas taxes make up less than a fifth of the price.

"Given that gas taxes make up less than a fifth of the price consumers pay at the pump, removing it offers little margin for price decreases when compared to the other factors that contribute to 85% of the price paid by consumers at the pump. Moreover, when external market and economic factors impact the price of oil, rising crude prices can often play an outsized role in pushing pump prices higher. As a result, the impact of gas tax holiday proposals can be limited because any price reduction from the lack of taxes can be quickly offset by a steady increase in oil prices, which is what we are seeing now."