Rise in taxes, gas price a double-whammy for your next fillup

RALEIGH, NC — Expect to spend a bit more at the gas pump in the new year. In North Carolina, a planned hike in gas taxes comes as prices are also on the rise.

On Jan. 2, AAA showed the average price of a tank of gas was back above $3 in Raleigh and across the state, about 10 cents higher than the week before. Meanwhile, the state is also tacking on an additional 2 cents per gallon, pushing that tax from 38.5 cents to 40.5 per gallon.

Population + need = higher taxes in NC

North Carolina has a formula for adjusting the gas tax. When the population goes up, putting more stress on the roads, and the cost of transportation projects like maintenance and improvements for those roads goes up, the state needs more money and adjusts the gas tax rate.

North Carolina is the third fastest-growing state in the nation according to the census data, etc the gas tax is the largest funding source for NCDOT transportation projects, some of which are estimated to cost as much as 20% more in the coming year.

North Carolina’s gas tax is the 13th highest tax in the nation, just above the US average. The increase works out to about an extra $15 to $20 a year for drivers who fill up a 15-gallon tank every week.

Gas prices on rise nationwide

Adding pain to the pump is the bottom line price of a gallon of gas. It is up 11.2 cents per gallon in two weeks, according to GasBuddy.

Cold weather across the country may be partly to blame for the price increases. When refineries are unable to operate – whether because of cold or holidays – fewer barrels of gas are available, creating an imbalance between supply and demand.

Electric vehicle growth cuts into gas tax revenue

As electric vehicles grow in popularity – currently 3% of car owners in North Carolina drives electric the state may consider different ways to raise the needed revenue.

One option is to charge all drivers – those with gas engines and those with electric cars – by the mile they drive. about a per mile driven fee, regardless of what kind of fuel you use.

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