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Gas prices fuel re-examination of taxes
 
By Bobby Tanzilo RSS Feed Twitter Feed
Managing Editor

E-mail author | Author bio
More articles by Bobby Tanzilo

Published Sept. 2, 2005 at 5:19 a.m.
Tags: gas, fuel, gasoline, refinery, refineries, prius, scooter, bike, cycling, prices, pay at the pump, fill up, oil, milwaukeegasprices.com

Suffering from the gasoline blues? Nothing will get you fired up faster than realizing that nearly 30 cents (29.7 to be exact) from each gallon of gas sold goes into the state coffers. That's among the highest gas tax rates in the nation.

And worst of all, state law automatically raises that tax every year!

But some elected officials on both sides of the aisle are trying to bring you some relief.

"We have a state law that requires a minimum mark up on the price of gas. I have supported repealing this law and letting market forces work," says Rep. Jon Richards of Milwaukee. "I would be even more supportive if it included language that would require cost savings to be passed along to consumers."

According to Richards, 11.9 cents has been added to the tax since the law went into effect in 1985.

"A number of us have been calling for the legislature to at least take a vote on this annual tax increase," Richards says. "The budget Gov. Doyle just signed reduced the gas tax by a penny for a year. That was a good first step. Rep. Dave Cullen from Milwaukee authored a bill to reduce the gas tax by five cents per gallon during certain parts of the year. Although the current leadership has not even allowed a hearing on that bill, it deserves a hearing and a vote."

Meanwhile, a trio of Republican state representatives from southeastern Wisconsin cooked up a temporary 15-cent reduction they call a "gas tax holiday" in August. That proposal has also gone nowhere.

But that doesn't mean the state isn't out there trying to help you out at the pump, says Richards.

"The consumer protection laws are strong weapons to fight people who are ripping us off at the pump. One issue coming up now is the law banning raising the price of gas more than once a day. ...They bust a lot of people on that. ... If you see this, or any other suspicious behavior, please call the Wisconsin Department of Consumer Protection at 1-800-422-7128."

He also acknowledges that something must be done to help consumers as the prices of gasoline skyrocket in Wisconsin.

"These gas hikes are slamming us, especially those of us who have a long drive to work. It is troubling to see oil companies score record profits when all of us are paying through the nose. Given that Katrina is the source of many of our problems and that federal law governs the lion's share of what we end up paying at the pump, the state does not have the power to dramatically reduce the cost of gas.

"We should, however, do what we can do. Broadly, the state can impact gas prices in three ways: reduce the state gas tax, remove the law that requires a minimum mark up on gas, and aggressively enforce our consumer protection laws. I believe we should take all these steps."

So, how do gas stations price their gasoline? And what accounts for the fact that on Thursday morning, prices in the Milwaukee area varied by more than 60 cents, ranging from $2.95 to $3.59, according to Milwaukeegasprices.com?

"The retail gas industry is very competitive and what you find is that station owners always pay attention to their competition," says Jason Toews, co-founder of Gas Buddy, which runs Milwaukeegasprices.com and similar sites in other cities. "They don't want to be too much lower or too much higher than anyone else."

So, Toews said, they do it the old-fashioned way.

"They drive by their competitors. That's exactly how they do it. A manager or an employee drives past the competition. Some might even use our Web site as a resource, too."

But refineries also charge different prices in different "zones," Toews says.

"They call it zone pricing. Some zones are typically higher than others, like an affluent area or a high-traffic area, like a freeway entrance. A metro area like Milwaukee might have as many as 100 different zones. They can justify it however they want, they just come up with some sort of reason."

What can you do about it all? Well, that depends on how you look at it. If it makes you feel better, you can take part in one of the many boycotts being announced via e-mail and the Internet.

Or as the Coalition for Lower Gas Prices suggests at its Web site, lowermygasprices.com, you can urge legislators to repeal Wisconsin's Depression-era minimum markup law, which requires retailers to sell their fuel at or above a certain price (9.18 percent).

You could also contact your elected officials and urge them to vote for lowering gas taxes, either temporarily or permanently. You can also report stations that you see breaking the law that prohibits more than one price rise per day.

As for what refineries charge, there's probably not a whole lot you can do.

But you can buy more fuel-efficient vehicles, carpool, ride your bike or walk to the store when possible and combine errands to cut down on miles driven each day. Those will undoubtedly effect how much you spend on gas and on the good old laws of supply and demand.

27 comments about this article.
Post a comment / write a review.

Recent Talkbacks ...

Posted by OMCreader on Sept. 14, 2005 at 2:07 p.m. (report)

Cozen Beguile said: ATP Oil up! If you put up a Grand, you made $128 today! Time to fill my gas tanks up for FREE! PEACE!

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Posted by OMCreader on Sept. 11, 2005 at 1:00 a.m. (report)

Cozen Beguile said: HINT: The only way you will get your gas money back is to put some cash into ATP Oil & Gas. Don't ever say I never gave back! Talk to your Broker about it! PEACE!

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Posted by OMCreader on Sept. 9, 2005 at 8:41 a.m. (report)

Larry said: I have a very easy solution to the problem of the high gas prices. Give Bush an option do some thing about it or we will start charging the OPEC boys outrageous prices on anything that comes out of the United States.

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Posted by OMCreader on Sept. 6, 2005 at 8:31 a.m. (report)

Christopher Gutierrez said: Would like to learn more about any active or future boycotts. I work in the Real Estate market and can influence a huge market of gas consumers.

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Posted by OMCreader on Sept. 4, 2005 at 9:16 a.m. (report)

Cozen Beguile said: What a bunch of BS! Exxon alone cleared 7 billion in the first QUARTER of this year. Then we give companies like that, billions of our tax dollars to drill for more oil for their own profit. Oil companies are the largest corporate welfare system we have! The better plan is to charge the oil companies a tax, instead of us, then use the money for alternative fuel research and social programs.

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