March 10, 2022

Gara Calls on Governor to Suspend State Gasoline Tax, Ease Burden on Alaskans

ANCHORAGE – Alaskans from Ketchikan to Utqiagvik and all points in between are feeling the pinch as surging oil prices driven by Russia’s invasion of Ukraine send gasoline costs skyrocketing. To help ease sticker shock at the pump Alaska Democratic gubernatorial candidate Les Gara is calling on Gov. Dunleavy to temporarily suspend the state gasoline tax.

“We have a duty to support Ukraine with a ban on Russian oil,” said Gara Wednesday in Anchorage, where the average price of unleaded gasoline has risen in a month from $3.75 per gallon to $4.51. “But the Governor can lead by pushing to suspend Alaska’s gasoline tax until oil prices fall to back to Earth.”

Alaska’s gasoline tax is among the nation’s lowest at 7.05 cents per gallon plus another .95-of-a-cent per gallon going toward the Oil and Hazardous Substances Release Prevention and Response Fund, but those pennies add up to money people need when spiking inflation rates nationwide already have Alaskans paying more for food and other necessities.

“Legislation by the Governor could suspend the gasoline tax temporarily, for a number of months, or until oil prices fall below $100 per barrel for a sustained time,” said Gara. “With higher oil prices, the state is already forecasted to be ahead by more than $1 billion in revenue. The suspended gas tax would only draw $30 million of that over $1 billion windfall, so this is an easy way to save Alaskans money in automobile, marine, and aviation fuel without harming the budget.”

If federal leaders proposing a suspension of the 18 cent per gallon federal gas tax succeed, then the total savings for consumers would be 26 cents per gallon during this time of high fuel prices.

Meanwhile, the important Oil and Hazardous Substances Release Prevention and Response Fund should be protected, but in the way it has been historically funded – with a pennies per barrel surcharge on oil companies that doesn’t raise the price of fuel.

“In 2015 I and others voted to add a simple 2 cent per barrel oil company surcharge to protect this fund. Those few additional pennies per barrel would not be noticed by oil companies reaping billions of dollars in profit from the Russian invasion of Ukraine, and COVID supply disruptions. Both have raised fuel prices and oil company profits. A 2 cent per barrel surcharge on oil companies could be at least a temporary measure, which oil companies profiting from today’s war could pay instead of asking consumers to foot the bill,” said Gara.

Instead of the 2 cent oil company surcharge proposed by Gara and others, funding came from the roughly 1 cent per gallon fuel tax on consumers, which passed in House Bill 158.

“The bigger solution is to do what I called for as a Legislator, and what I’ve called for in this campaign. We should end the over $1.3 billion in unjustified oil company tax credits we give to oil companies. These subsidies just make us poor as a state,” said Gara.

The state also imposes a small tax on jet fuel, which Gara isn’t asking to be suspended. “The gasoline tax suspension should be targeted to protect Alaska consumers and businesses,” said Gara.