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Politics

Happy holiday: Maryland gas prices are down for now after tax pause. Here’s how much.

The average price of gasoline in Maryland has dropped by 39 cents since a temporary moratorium on the state’s fuel taxes was signed into law Friday, according to figures from AAA.

The dip at the pump likely represents both savings from lifting the state gas tax — 36 cents per gallon — and the volatile nature of oil prices on the global market, which have been particularly erratic over the past two months amid rising demand, sluggish production and the invasion of Ukraine by Russia, one of the world’s largest oil exporters.

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For a motorist filling up with 15 gallons — a typical tank size on most cars — the modestly lower tax-free prices works out to a total bill $5.85 lower Wednesday than it would have been last Friday.

Nationally, average prices have ticked downward since Friday as well, but not nearly as much: just 3 cents per gallon, according to AAA. Prices have dropped by a bit more in states that neighbor Maryland.

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But it’s unclear whether prices will continue dropping or if another surge might be on the way. The price of crude oil shot up again over the past week, with the average price paid for a barrel of West Texas Intermediate — a common grade of crude oil that’s used as a benchmark for prices in the U.S. — rising 4.4% on Wednesday alone.

Oil producers in the United States have increased output in response to steadily rising prices in recent months, driven in part by increased travel as cases of COVID-19 drop in many countries. But other major oil exporters — including Russia and the OPEC group of countries led by Saudi Arabia — have opted to let prices rise instead of quickly ramping up production.

Russia’s bloody invasion caused additional uncertainty in the oil markets and led many countries, including the United States, to avoid buying Russian oil.

Maryland was the first state in the country to lift state taxes on gasoline and diesel fuels, a temporary tax break backed by both the Democrat-controlled General Assembly and Republican Gov. Larry Hogan.

The tax holiday runs through April 16 — unless lawmakers vote to extend it — at which point gas stations will again have to start paying $0.36 in taxes on every gallon of gasoline (the tax rate on diesel fuel is slightly higher).

Georgia quickly followed with its own gas tax holiday and a number of other states — as well as the federal government, which charges its own $0.18-per-gallon tax — are considering such a move.

The 30-day tax break is projected to cost Maryland more than $93.6 million in revenue earmarked for a transportation trust fund that pays for road and transit construction and maintenance projects. Lawmakers plan to replace that lost revenue with revenue from the state’s general fund.


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