The start of the summer driving season is more than three months away, but gasoline prices already are going through the roof.
The U.S. Energy Information Administration says the average price for gas in the United States on Feb. 13 was $3.523 per gallon. That's four cents more than the previous week and 38 cents higher than that week a year ago.
It's also the highest that U.S. gas has ever been at this time of year.
That's good enough — or bad enough if you have to drive a lot — to earn this week's By the Numbers recognition.
High now, higher later: U.S. gas prices typically increase around Memorial Day, the unofficial start of summer vacation season. What does such a sharp and early increase mean for June, July and August travel?
Some energy analysts say that Americans could be looking at $5 a gallon gas this summer.
Why so much and why now? And no, oil company greed is not the answer, or at least not the main answer.
Political turmoil in Iran, Sudan and Syria is pushing up oil prices. Issues with U.S. refineries — regular maintenance closures, the cost of making summer grade gas — also are contributors.
If the current situation continues and gasoline prices continue to climb, the IRS could find itself making a midyear increase in the standard mileage deduction rate for the second year in a row.
Political posturing: Politicians also are getting involved in the gas price issue.
At the federal level, Congress is working, sort of, on a new transportation bill. And that means taxes are part of the discussion.
Most of the money that Uncle Sam distributes for the upkeep and construction of the country's highways, transit programs and other transportation projects comes from the federal gasoline tax of 18.4 cents a gallon and the 24.4 cents a gallon tax on diesel. Those taxes go into the Highway Trust Fund.
But, reports the Washington Post, "gas tax revenues have grown too meager to support" the infrastructure that the funds originally built. The paper continues:
"Congress has been in a dither over what to do about that since the last long-term transportation bill expired more than two years ago. Now they have reached a crisis point from which there is little chance of escape, experts say. Unless they address the funding issue, the Highway Trust Fund that the gas tax has supported is projected to run out of money as early as October. If that happens, the spigot that produces some funding for virtually all aspects of surface transportation runs dry."
Fuel tax hikes, proposed and passed: Sen. Mike Enzi (R-Wyo.) last week introduced sought to add a provision to the Senate Finance Committee's part of the transportation bill that would have pegged the federal gas tax to inflation. That would put a few more dollars into the Highway Trust Fund.
But this is 2012, an election year. That's why Enzi's idea didn't go far.
Senate Finance Committee Chairman Max Baucus (D-Mont.) acknowledged that discussion of a federal gas tax hike could be a worthwhile discussion some day, but isn't the time for such talk.
Some state lawmakers, however, aren't as tax reticent. Faced with possible reductions in federal funds, they're looking at hiking their state fuel taxes.
Virginia's Senate has passed legislation that would index the Old Dominion's gas tax, which has been 17.5 cents per gallon since 1986, to inflation. The proposal's future, however, is less clear in the House of Delegates.
Across the Potomac, Maryland Gov. Martin O'Malley wants to phase in a 6 percent state sales tax on gasoline. O'Malley's timing, however, is not good. The state gas tax hike would be delayed if gas prices spike.
In Iowa, a state gas tax increase is gaining bipartisan support from state lawmakers.
And in North Carolina, drivers have been paying more for gas since Jan. 1. Pump prices there went up then thanks in part to a 3.9-cent increase in the Tar Heel State's gas tax. It now is a record 38.9 cents.
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Kay
Ryan, not a stupid question. Congress changes laws so much it’s hard to keep track. But yes, you still can deduct your state and local income taxes regardless of what happens to the state and local sales tax deduction.
Ryan
Possibly a stupid question, but I haven’t seen it spelled out anywhere. Currently, in 2012, state sales tax are not eligible for itemized deductions. Is state income tax still eligible?