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Pennsylvania Gas Tax Increase Could Lead to Higher Prices at Pump

Suppliers say that they could end up passing along the tax hike to consumers.
December 3, 2013

​HARRISBURG, PA – Pennsylvania wholesale fuel taxes increase January 1, and gas and diesel suppliers in the Keystone State are expected to pass along the entire increase to consumers at the pump, the Pocono Record reports.

That message has been muddied by state lawmakers, who have suggested that the cost may not be entirely passed along to consumers. However, Sheetz, which supplies fuel to the 236 gas stations and convenience stores that it owns in Pennsylvania, said it would pass along the higher wholesale tax.

"Our margins are extremely minimal with gasoline, and any increase in cost, like any other product, ultimately gets passed on in the retail price," said spokeswoman Monica Jones.

John J. Reilly, president of fuel distributor Reilly & Sons, said he cannot absorb the cost, either.

"Unfortunately, if it's going to go up 10 cents, it's going to go up 10 cents to people we supply," Reilly said. "Nobody can eat a penny today, much less 10 cents."

Effective January 1 in Pennsylvania, there will be a 9.5 cents per gallon tax increase on unleaded gasoline and a 13 cents per gallon tax increase on diesel, according to PennDOT.

The law covering the increase repeals a 12-cents per gallon tax that gas station owners pay to the state. To offset that loss, the law increases the rate of the Oil Company Franchise Tax.