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What’s The REAL Price of Gas? What Actually Comes from The Refinery vs. Taxes?

How much of the price of a gallon of gas goes to the government?
. (Photo by Mark Renders/Getty Images)

You may or may not be surprised. With holiday travel, it’s a topical issue.

When we hear the weekly gas prices being talked about locally, and nationally,  what’s the REAL price of the product?

Buy a burrito at the convenience store, and it will be about $.8 cents more due to sales tax.  But when you pump the car full,  how much are you really paying for the fuel itself?

The Washington Policy Center has broken down how much we pay for gas taxes in our state,  and it’s topical especially with Gov. Inslee floating the idea of a new gas tax to fund his transportation budget.

The Center is pushing for lawmakers to post a “truth-in-advertising” type of label on gas pumps, showing the actual break-down of what you pay.   They say it would enable consumers to actually know what they are paying, understand it, and verify it’s legit.   It would also perhaps raise awareness among taxpayers about how much of their money is being spent (blown?) by the government.

For starters, $18.4 cents of each gallon goes to the federal government for the national gas tax.  Then Washington tacks on another $37.5 cents per gallon for our own gas tax.   Did you know state lawmakers have raised the Washington state gas tax 19 TIMES since 1921?  After staying relatively unchanged from 1992 to the end of the decade, the tax has shot up considerably since 2000, and if Inslee and other legislators get their way, it could go up as much as another 25%.

WPC says the average actual cost of a gallon of gas is only around $2.75.  But when you add in the taxes, it jumps to at least $3.30.    Our gas tax per gallon is $.6 cents higher than Oregon, $.11 cents higher than Idaho, and again (on average) about $.9 cents higher than Montana.

The WPC says lawmakers have purposely hidden the tax costs inside the total cost of a gallon of gas.   Many critics say if the actual breakdown were posted at the pump, showing retailer’s cost, then the taxes, and final price,   there would be a lot MORE resistance to legislative attempts to tack on more and more fuel taxes.

Perhaps that’s why lawmakers have allowed the taxes to be included in the total pump price shown to consumers.   It might be if we are shown how much they are taking every time we fill up,  their ability to raise gas prices would be greatly restricted.

 

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