The state’s fuel tax burden is among the highest in the country
Gas prices are at their highest for seven years. But there is reason to be optimistic as the holiday season approaches.
Springfield’s average price for a gallon of regular gasoline is $ 3.487. In October, fuel prices rose 17 cents in the city, as the state saw gas prices rise 15 cents, to $ 3.555.
Nationally, gasoline prices followed a similar trend, standing at $ 3,402, following an increase of 21 cents in October.
âGas prices are at levels we haven’t seen since 2014,â AAA spokeswoman Molly Hart said. “It is the high cost of crude oil that is the main driver of the increase in prices at the pump.”
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While prices are not expected to rise at the same rate as last month, there could still be slight increases, according to Hart.
On Friday, the price of US crude oil stood at $ 83.57, down 19 cents from the week before, marking the first weekly loss in 10 weeks. In October, prices per barrel rose 12%, from $ 75.88 to $ 84.65.
With the rising cost of crude oil causing the cost of gasoline production to skyrocket, prices per barrel are expected to continue to fluctuate between $ 82 and $ 86 as the holiday season approaches. According to Hart, they shouldn’t go over that range.
âSo, hopefully consumers won’t see a big hike in gasoline before the holidays,â she said. “But the price at the pump depends so much on the price of a barrel of crude oil, and there are just a lot of global factors at play.”
Taking into account the high tax burden of Illinois
Even though the Illinois average price for a gallon of gasoline and the increase in fuel prices over the past month both rank outside the top 10, the state’s gasoline tax remains l one of the highest in the country.
Illinois is also one of six states to impose a sales tax on fuel, according to the Illinois Fuel & Retail Association.
âIllinois is unique in that we let local government units tax fuel as well as the state of Illinois,â said Josh Sharp, general manager of the Illinois Fuel & Retail Association. âSo there is a city tax and a county tax in several cities in Illinois. In Cook County, even the Regional Transportation Authority has a tax. “
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The Illinois gasoline tax is 38.7 cents per gallon. But the average state tax burden on gasoline is 53.87 cents per gallon when the state’s 6.25% sales tax is factored in along with other variable taxes imposed by municipalities and the counties.
âThis only makes the cost of a gallon of gasoline worse,â Sharp said. âWe are very unique in this. Hawaii is the only other state that allows this kind of pyramid. In most of the rest of the country, these ideas are somewhat foreign to them. “
The gasoline tax burden for other Midwestern states such as Indiana (46.62 cents per gallon), Wisconsin (32.92 CPG), Iowa (30.50 CPG), Kentucky (26 CPG) and Missouri (17.42 CPG) are much lower, according to data from Illinois. Fuels and Retail Association.
Even as the state’s gasoline tax, which doubled in 2019 – from 19 cents per gallon to 38 cents per gallon – is raising prices at the pump in Illinois, the last time the state saw Fuel prices this high was in 2014. It was before the American shale boom – when the United States saw a significant increase in oil production.
What can we expect to move forward?
In April 2014, gas prices in Illinois jumped to $ 3.91 while fuel prices in Springfield peaked at $ 3.80 in June.
“At the height of the pandemic, countries cut back on production and they were slow to ramp up production again,” Hart said, explaining the current spike in gas prices. âSo now we are struggling to keep pace with the demand for returns.
Sharp said he hopes gas prices will stabilize and eventually decline over the next year.
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âDuring COVID, we had a drop in demand for gasoline,â he explained. âNo one was driving, everyone was staying at home. The oil companies have shut down and have not put as much product through the pipelines. You didn’t have any oil exploration. It takes a long time for this whole network to come back online and go back to what we’re used to seeing on the supply side. And it’s not quite there yet.
“â¦ But I think as the entire supply of oil comes back online – more drilling, more oil exploration, more people in the fields to refine the product – it will help stabilize the price. and the price will drop from where it is today. “