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Tennessee representatives call for moratorium on gas tax

Jon Styf
The Center Square

Two Tennessee state representatives are calling for a 90-day moratorium on gas and diesel taxes in the state as prices are at record-high levels in the U.S. and approaching record numbers in Tennessee.
Nashville Democrat state Reps. John Ray Clemmons and Bo Mitchell sent a letter to Gov. Bill Lee on Tuesday before speaking at a news conference about the plan.
“This 90-day moratorium would be about $224 million put back into the pockets of Tennesseans and Tennessee families,” Mitchell said. “With the rising cost of gas prices, many families are just now recovering from the pandemic, being out of work. They just don’t need this extra cost put upon them again. Putting this $224 million back into families’ pockets will ease the pain for many Tennesseans.”
Tennessee’s gas tax is 27.4 cents a gallon, leading to an estimated $896 million in annual tax collections that is divided between the Tennessee Department of Transportation (16.4 cents a gallon), local municipalities (10.2 cents a gallon) and the state general fund (0.8 cents a gallon).
Tennessee gas prices were $3.96 a gallon Tuesday, and the national average was a record-high $4.17 a gallon nationwide, according to AAA. Those prices were up from $3.87 a gallon Monday, $3.46 a gallon a week ago, $3.19 a gallon a month ago and $2.58 a gallon a year ago in Tennessee, according to AAA.
The highest recorded Tennessee average was $4.12 a gallon in September 2008, according to AAA. At $3.94 a gallon, Chattanooga’s current price is approaching the record $3.98 mark. Jackson is at a record-high $3.96 a gallon average, and Memphis is at a record $3.94 average. Nashville’s $3.98 a gallon average price is just behind the record $4.13 average from 2008, according to AAA.
“While this might require a financial sacrifice temporarily, on behalf of our state, we believe this is a signal and a strong investment in democracy abroad,” Clemmons said.
The representatives’ letter was sent on the same day President Joe Biden announced a ban on Russian oil imports.
“The USA should not be funding authoritarian regimes like Russia by purchasing their oil,” Tennessee U.S. Sen. Marsha Blackburn tweeted. “We must restart American energy, and become energy independent again.”
Patrick DeHaan, head of petroleum analysis at GasBuddy, said the market already had adjusted to the Biden announcement before it happened, and the U.S. purchases only a small amount of slightly refined products from Russia.
DeHaan said prices likely will continue to increase, but the pace will slow.
“If the EU cuts off Russian energy, that would cause an absolute explosion in the price of oil,” DeHaan warned.
DeHaan declared Monday the national average for gas prices hit a record-high based on GasBuddy numbers at $4.104 per gallon.
“Americans have never seen gasoline prices this high, nor have we seen the pace of increases so fast and furious,” DeHaan said. “That combination makes this situation all the more remarkable and intense, with crippling sanctions on Russia curbing their flow of oil, leading to the massive spike in the price of all fuels: gasoline, diesel, jet fuel and more. It’s a dire situation and won’t improve any time soon.” DeHaan, however, did push back on the notion that gas stations were artificially raising prices, saying they are charging customers based upon their costs to replace fuel.
“They don’t get to set prices,” DeHaan said. “The market does.”
DeHaan added consumers limiting use by cutting out unnecessary driving, when possible, or carpooling would help curb demand and have an effect on prices.

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