$5 a gallon gas is here, and price could keep rising
Connecticut offering some relief with its suspension of 25-cents-a-gallon excise tax
Average gasoline prices in the state and nation hovered around $5 a gallon late this past week, showing no sign of ending their steady, monthslong climb and leaving Connecticut drivers to calculate what they’d be paying if the state hadn’t suspended its 25-cents-a-gallon excise tax through November.
On Thursday, the national average surpassed the $5 mark for the first time ever, according to GasBuddy, a price-tracking platform, while AAA pegged it at $4.97.
In Connecticut, where Gov. Ned Lamont signed a bill March 24 suspending the state’s excise tax on gas from April 1 to June 30 and lawmakers from both parties later supported extending the suspension until Dec. 1, Thursday’s average price was $4.95.
That also was the average price in the New London-Norwich area, where it was up from $4.71 a week earlier, $4.33 a month earlier and $3.10 a year earlier, according to AAA.
In the region, a random sampling of service stations showed prices ranging from a low of $4.79 at Costco in East Lyme to a high of $5.19 at the Shell station at 242 Greenmanville Ave. (Route 27) in Mystic. Across the border in Rhode Island, where lawmakers are considering suspending the state's 35-cents-a-gallon gas tax through the end of the year, a Westerly Mobil station was charging $5.15.
Have all gas station owners been abiding by the rules of Connecticut’s gas-tax holiday?
As of Thursday, state Attorney General William Tong’s office had received 227 complaints about potential price-gouging, according to a spokeswoman for the office, Eliz
abeth Benton. The office had sent 103 letters urging compliance with laws and had closed 50 of the cases. It was too soon to say whether any of the complaints will result in enforcement action, Benton said.
Not all of the complaints necessarily came in response to the suspension of the gas tax.
In early March, Tong announced an “abnormal market disruption” in gas prices would trigger certain consumer protections against price gouging at the retail, distributor and wholesale levels through April 2. The market-disruption declaration, which has been triggered since then and remains in effect, may have prompted some of the 227 complaints.
“Gas prices fluctuate constantly, and price changes and price increases are normal,” Tong said in a statement his office released March 7. “But what we have seen this past week is not typical, and we can expect even more volatility due to the unprovoked and unconscionable Russian invasion of Ukraine. The Department of Energy and Environmental Protection has notified my office of an abnormal market disruption, which triggers additional consumer protections during this time.”
During an abnormal market disruption, it is unlawful to charge an “unconscionably excessive price” for energy, including gasoline, electricity and home heating oil. An unconscionably excessive price may occur when there is a gross disparity between the price charged during the market disruption and the price charged immediately before the market disruption.
State law requires that the Department of Energy and Environmental Protection monitor the wholesale price of gasoline in the Hartford and New Haven areas. When the wholesale price exceeds $3 a gallon and the daily price change is more than 15% when compared to any of the previous 90 days, DEEP is required to alert the attorney general's office and the Department of Consumer Protection to an abnormal market disruption.
"Overcharging consumers is unacceptable at any time, but during this abnormal market disruption it is illegal," Tong said.
The attorney general's office may file a lawsuit against an alleged price gouger and seek appropriate relief, including injunctive terms, restraining orders, restitution and civil financial penalties designed to deter future unscrupulous sellers.
Anyone who suspects price gouging should file a complaint with the attorney general's office online at dir.ct.gov/ ag/complaint/ or by calling (860) 808-5318.
GasBuddy reported Thursday that gas prices have surged in recent weeks amid a global decline in refining capacity due to the COVID-19 pandemic and an increase in demand heading into the summer months. It noted the price of oil also has climbed because of sanctions that have limited the supply of Russian oil as well as a yearslong decline in U.S. refining capacity.
“It's been one kink after another this year, and worst of all, demand doesn't seem to be responding to the surge in gas prices, meaning there is a high probability that prices could go even higher in the weeks ahead,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “It's a perfect storm of factors all aligning to create a rare environment of rapid price hikes. The situation could become even worse should there be any unexpected issues at the nation's refineries or a major hurricane that impacts oil production or refineries this summer.”
Reductions in gas taxes do offer some relief, according to Kiplinger, a publisher of business forecasts and personal financial advice.
Connecticut, which had the lowest average gas price in the Northeast last week, was the third state to enact a gas-tax holiday after Maryland and Georgia. New York enacted a gas-tax holiday in April and Florida did so in May with more states expected to follow suit, Kiplinger reported.
A bill in Congress would temporarily suspend the federal government's 18.4-cents-a-gallon gas tax for the rest of the year.