Changes in fuel taxes will prompt changes in gas prices

A new report prepared for the region\'s Transportation Planning Board says the easiest way to fund transportation improvements is with gas taxes. (WTOP)

WASHINGTON – The gas landscape is about to change dramatically in Maryland and Virginia.

On July 1, Maryland gas prices will go up 3.5 cents a gallon, as the state raises the gas tax for the first time in 20 years to help fund three mass transit projects, including the Purple Line.

In all, the increases in Maryland could add up to another 21.1 cents a gallon by 2018, according to an analysis by AAA Mid-Atlantic.

Virginia, on the other hand, is ending its excise tax on fuel and replacing it with an increase in the sales and use tax that will be dedicated to transportation. The change is the first for Virginia’s fuel tax since 1987.

fuel taxes (Courtesy of AAA Mid-Atlantic)

Here’s a look at how the fuel taxes will change. (Courtesy of AAA Mid-Atlantic)

The end result in Virginia, according to AAA, will be a decrease of about 6 cents a gallon, starting July 1.

However, drivers in traffic-congested Northern Virginia and Hampton Roads will pay slightly more for a gallon of gasoline or diesel, AAA says.

Why? In Northern Virginia, there’s a 2.1 percent sales tax for transportation projects, collected at the distributor level. In Hampton Roads, a new law calls for an extra 2.1 percent wholesale tax.

Meanwhile, in its latest gas survey, AAA find gas prices remaining stable.

“AAA continues to believe gas prices will drop below $3.50 per gallon by the end of the month, especially since domestic production and distribution concerns have eased and crude oil has declined,” said John B. Townsend, AAA Mid-Atlantic spokesman, in a news release.

“However, market-watchers have turned a wary eye to tensions in Syria to see if oil prices will be affected. With crude prices starting to settle, prices at the pump should remain stable, barring any unforeseen circumstances.”

The week of June 23, AAA’s survey of gas stations found the average price of a gallon of gas was $3.57 in the D.C. metro area, compared with $3.39 a gallon a year ago.

WTOP’s Alan Etter contributed to this report. Follow @WTOP on Twitter.


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