Well, that didn’t last long.
Days after Florida’s monthlong gas-tax holiday took effect on Oct. 1, global oil prices spiked and triggered a quick rise in retail gas prices that wiped out most of the savings.
You can blame gasoline distributors and retailers who are lightning-quick to hike prices when any oil market disruption occurs, then take their sweet time reducing them when those disruptions ease.
Florida’s gas-tax holiday took effect on Oct. 1, suspending the 25-cents-a-gallon surcharge that helps fund transportation projects in the state.
Motorists saw immediate savings. Between Sept. 30 and Oct. 5, the average price of a gallon of unleaded gas tumbled by 18 cents from $3.36 to $3.18, according to data archived on the price-comparison website GasBuddy.com.
But on Oct. 5, leaders of the world’s major oil-producing nations announced an agreement to cut production by two million barrels a day. The cuts were necessary to prevent oil prices, sliding since hitting record highs in June, from falling further, OPEC+ leaders said.
The announcement boosted U.S. oil prices, which had been hovering below $80 in late September, to more than $93 at the close of trading on Friday.
And Florida’s average gas price shot up 12 cents a gallon to $3.30 between Oct. 5 and Oct. 7, wiping out 67% of the gas tax holiday savings, according to Gas Buddy’s numbers.
Travel club AAA, which calculates gas prices using its own data, reported that Florida’s average per-gallon price was $3.39 before the gas tax holiday began. By Monday, the average was back up to $3.33, erasing all but 6 cents of the tax holiday savings.
Wholesale gas prices have increased more than 30 cents since the OPEC+ announcement, AAA spokesman Mark Jenkins said in his weekly gas price update.
Patrick De Haan, head of petroleum analysis at GasBuddy.com, said by email, “The surge in oil prices and wholesale gasoline after the OPEC decision completely offset the gas tax holiday. Lousy timing.”
On Monday, average prices were $3.37 in Broward County, $3.36 in Miami-Dade counties and $3.50 in Palm Beach County, AAA’s website showed. Prices are typically higher in South Florida because of the higher cost of doing business here.
The boomerang effect was even more dramatic at some stations that had been selling for less than the state average before the gas-tax holiday.
A Marathon station on West Atlantic Boulevard in Margate dropped its price from $3.19 to $2.93 when the gas-tax holiday began. After the OPEC+ announcement, the price increased to $3.29.
Looking at the events from a tank-half-full perspective, it’s fair to note that gas prices averaged more than $4 a gallon and were still rising when Gov. Ron DeSantis and the Florida Legislature enacted the gas-tax holiday in early May.
Florida’s average price hit a record high $4.89 on June 13, based largely on supply fears related to the Russia-Ukraine war, before gradually declining over the next three and a half months.
A 25-cent gas-tax holiday in June would have cut prices by a much smaller percentage compared to a 25-cent decrease in October.
And even at $3.30 a gallon, Florida’s average gas price was fifth-lowest among the 50 U.S. states and District of Columbia, Gas Buddy data showed. The national average on Oct. 9, by comparison, was $3.92. California, with tougher emissions standards and higher taxes, owned the nation’s highest average price — an eye-popping $6.33 a gallon.
DeSantis’ office did not respond to an email seeking comment about the recent gas price hikes.
Critics accused DeSantis of scheduling the holiday in October because it’s the month before voters will decide on Nov. 8 whether to re-elect him. State House member Anna Eskamani, an Orlando-area Democrat, pointed out on Twitter that the lost gas-tax revenue will be offset with federal COVID-19 relief money.
Republicans have long blamed price hikes of the last two years on the Biden Administration’s clean energy policies, which, they say, have discouraged new domestic oil drilling and kept prices artificially high. De Haan, while saying that Biden gets more blame than he deserves, nevertheless has acknowledged that the administration’s stated commitment to phasing out fossil fuels may be discouraging domestic drillers from investing in new capacity.
Not all gas stations used the OPEC+ announcement to justify an immediate price increase.
In South Florida, a handful of gas stations were still selling below $3 a gallon, GasBuddy’s comparison charts showed.
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