Thursday, September 18, 2008

Governor Rell Wants Us To Report Price Gouging - Should We Report The State Too?

CT's Governor, M. Jodi Rell, issued a press release asking for people to report gasoline price gouging and an investigation into Cumberland Farms. I found that amusing and infuriating. Let me explain.

In the Governor's recent press release it said:
Governor M. Jodi Rell today directed the Department of Consumer Protection (DCP) to subpoena records from Cumberland Farms Inc. after the Governor’s Office and the DCP received numerous, specific complaints about a sudden increase in gasoline prices at the company’s stores.

Governor Rell also announced that subpoenas are being prepared for several other gasoline companies and said her Administration is crafting specific language to define “price gouging” and make it easier to investigate and prosecute suspected profiteers.
First of all, my local Cumberland Farms offers the lowest gas prices in the area. Perhaps she ought to be going after some of these other suppliers who consistently charge 10 to 15 cents more a gallon around town.

Surely the Governor recognizes what the public is feeling. She even said:
“Customers are fed up when they fill up, gasoline fuels more than our cars and trucks – it really powers our economy. From the simple need to get to and from work to the ability to move goods across the state, these price increases have a tremendous ripple effect on residents and businesses. I have made it clear that I will move aggressively to investigate allegations of price gouging at all levels. We owe it to the consumers, whose wallets are increasingly running on nothing but fumes.”
So the reason why I became amused and infuriated all at once is this: If the Governor really wants to investigate gasoline price gouging, she doesn't have to look much further than her own administration and the enormous gasoline taxes that we are paying in Connecticut - especially the gross receipts tax which rakes in more tax revenue the higher the price of gasoline soars. Talk about "suspected profiteers"!

Customers paying for gasoline in Connecticut face roughly $0.50 cents per gallon in state tax alone! CT charges two taxes on gasoline sold in the state. One is a flat 25 cent per gallon CT State excise tax. The other one is the Petroleum Products Gross Receipts Tax, which is currently set at 7% and is levied as a percentage of the wholesale price. As the price of wholesale fuel rises, the amount paid in tax also soars, which is primarily why we have enjoyed such high surpluses in our budget the past two years. As the wholesale price of gas went up so did the tax - which basically was a hidden tax on the consumer. Many legislators have been calling on an elimination of that Gross Receipts tax - or at least to cap it when the wholesale price of gasoline reaches a certain price. Another blogger agrees.

The Gross Receipts tax is where this state is price gouging it's consumers.

CT residents, and those travelers through our state, pay substantially more than our neighboring states. I will wager that anyone motoring east to west in this state makes sure they gas up before entering and after leaving our lovely borders. Massachusetts gasoline is usually 15 to 20 cents lower per gallon and that is due to our high state gas taxes. I can't even imagine how gas stations close to the Massachusetts or New York border even stay in business.

Additionally, as David Aron (Candidate for State Representative in Hamden) , writes:
Gasoline in Connecticut is among the most highly regulated in the nation. Due to federal air quality regulations, Connecticut is required to sell reformulated gasoline, in that it has an oxygen content of 2% or more. Because Connecticut gasoline is reformulated with ethanol, which must be shipped by barge train or truck from the Midwest, it can add significantly to the price per gallon. In 2004, the Connecticut Department of Environmental Protection (DEP) requested that federal Environmental Protection Agency (EPA) grant Connecticut a waiver from the oxygen content requirement. This request was denied "because the State did not submit the technical data necessary for the Agency to determine what impact the waiver would have on emissions and air quality."
David Aron says that our legislature should ensure that the DEP resubmit the waiver request to the EPA with the proper data included and that we ought to call for a reevaluation of state regulations on gasoline. By reducing the federal and state regulations, we can increase the potential gasoline supply and thereby reduce the price.

We all recognize that this and other high gas taxes stifle business and restrict the movement of our residents. Even the Governor has said so. It is time that our state government also stop their price gouging via CT taxes, and give the people some relief at the pump.

The Governor has set up toll free numbers to call to report price gouging, and perhaps we should all be calling her office as well to complain about high gas taxes which also price gouge the consumer.