Connecticut’s Gas Tax Increase Frustrates Retailers

The state’s gas tax will be 26 cents higher than Massachusetts and 16 cents more than Rhode Island.

June 26, 2013

HARTFORD – On July 1, Connecticut’s gas tax and diesel tax will increase, a move that has retailers concerned, the Hartford Business Journal reports. The 49 cents per gallon gas tax means gasoline pump prices will be 26 cents higher than in Massachusetts and 16 cents higher than in Rhode Island.

“Our members have stopped investing in the [Massachusetts] border, and they certainly aren't buying anywhere near there,” said Chris Herb, president of the Connecticut Energy Marketers Association (CEMA). “They are just going to get pounded.”

Retailers have told CEMA that major diesel and gasoline customers, such as landscapers, now cross over to Massachusetts for fuel because it’s cheaper. “When those guys are up there, they are buying cigarettes and sodas, and I don't even know how much ancillary in-store sales we are losing,” said Herb. “Those dollars are taken out of our pocket.” 

The new tax ranks Connecticut in third place, after California (number one) and New York (number two) in terms of gasoline taxes, according to the American Petroleum Institute. Connecticut will attain the number one slot for diesel taxes at 55 cents per gallon, jumping over California, according to the institute.

For diesel, the higher tax pushes Connecticut past California to nab the top spot, according to API. Connecticut’s 55 cents per gallon tax on diesel is a nickel more than New York, 23 cents more than Rhode Island and 32 cents more than Massachusetts. “Unfortunately, it is an example of how we set ourselves apart in a less than favorable way in terms of business costs and competitiveness compared to other states,” said Eric Brown, director of energy and environmental policy for the Connecticut Business & Industry Association.

The four pennies bump per gallon in the gas tax is the result of legislation approved in 2005, which is just now going into effect. Some Republican lawmakers tried to halt the increase, but Democrats stopped the bill in the Finance Committee. Lawmakers recently approved a measure to stop mandating vapor recovery equipment.