Amid record setting inflation and some of the highest gasoline and diesel fuel prices in state history, Connecticut’s tax on diesel fuel jumps an additional 9.1 cents today from 40.1 cents per gallon to 49.2 cents per gallon.
The increase is part of a 2007 statutory requirement that the Commissioner of the Department of Revenue Services calculate the tax on diesel fuel for the next fiscal year, and although the change was little noticed in the past, this year it has become a point of contention as consumer prices on nearly everything have risen dramatically over the past year.
The Connecticut Energy Marketers Association (CEMA) says the 23 percent increase in the diesel tax represents “the largest increase in recent memory,” and that the increased diesel tax will affect prices on everything transported by trucks in Connecticut, including gasoline, which is delivered by diesel powered trucks.
The dramatic rise in fuel prices is driven, in part, by the on-going war in Ukraine, which has resulted in the United States exporting more diesel fuel to Europe, which relies primarily on diesel fuel for transportation.
In response to surging gasoline prices, Gov. Ned Lamont temporarily suspended Connecticut’s 25 cent gasoline excise tax, one of the state’s two taxes on fuel, until November 2022 but has resisted calls from CEMA and Republican gubernatorial candidate Bob Stefanowski to suspend the diesel tax increase.
Saying he understands that the state legislature can’t control many of the factors driving inflation, such as the war in Ukraine, CEMA President Chris Herb said the diesel tax increase is a case of “over taxation.”
“This is a windfall tax revenue that is not earmarked for anything,” Herb said in a press release. “No one would get hurt if it’s suspended. It’s over taxation, and there is no reason in the world not to suspend it when the state is sitting on a record-breaking surplus.”
Stefanowski has been holding a countdown until the tax increase on social media and circulating a petition online that says, “Connecticut needs fast-acting relief at the pump from the state diesel tax. Let’s end the inflationary pressures that are eating away at the budgets of Connecticut residents.”
Stefanowski and Republicans are also holding rallies across the state, many at gas stations, to highlight their calls for $1.2 billion in tax cuts as Connecticut’s 2022 budget surplus topped $1 billion and the state maintains a maxed out Rainy Day Fund.
Lamont and Democrats in the General Assembly did offer some tax relief this year, suspending some taxes – like the gasoline tax – and increasing property tax credits, offering a child tax rebate, capping motor vehicle property taxes, and decreasing taxes on retirement payments. All told, the tax cuts amount to roughly $660 million.
Lamont has said he favors reducing taxes for Connecticut residents but believes suspending the diesel tax will mostly favor out-of-state truckers. President Joe Biden has indicated support for suspending federal gasoline and diesel taxes over the summer, but Congress would be required to pass the measure.
Connecticut’s gasoline and diesel prices have remained slightly below its neighbors, according to AAA, and prices have dipped from previous highs in June and May. Average diesel prices in Connecticut topped out in May at 6.44 per gallon, but have dipped down to $6.08 per gallon, according to AAA.
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