Tuesday, April 19, 2011

Pain at the Pump

Yow!! Gas prices keep rising and rising - and MoDOT doesn't like it any more than you! Unlike many state DOT's in America, MoDOT doesn't benefit when gas prices rise at the pump because we get a fixed rate per gallon. Missouri's state fuel tax is 17 cents per gallon (for gas and diesel) no matter if gas is 1 dollar or 50 dollars a gallon. In fact, Missouri fuel taxes haven't increased since 1996. The fact that Missouri ranks low for fuel taxes is why gas prices in the show-me state are also some of the lowest in the country.

Let's break it down: MoDOT receives 12.45 cents of the 17 cents per gallon of gas purchased (local governments receive the remaining 4.55 cents per gallon) and MoDOT receives approximately $500 million a year from the state fuel tax. The federal fuel tax rates are 18.4 cents on gasoline and 24.4 cents for diesel. The price Missourians pay at the pump comes from four different costs: 65 percent crude oil, 15 percent refining, 10 percent distribution and marketing, and 10 percent federal and state taxes.

Higher gas prices hurt MoDOT because as prices rise, people buy less, which can decrease our funds. Missouri ranks 42nd for fuel taxes, yet we maintain the 7th largest highway system in America.

MoDOT's Chief Engineer Dave Nichols explains more about pain at the pump and how it affects Missouri in last week's To The Point podcast.

1 comment:

Judy said...

I do the best I can to help you out. We drive the width of MO to and from Shell Knob, once a month. I slip across the Mississippi to buy gas and pay my taxes to my favorite state, while saving money. Raise taxes and I will probably still do that.