Gas tax breaks start statewide and on LI

High gas prices likely will rise more this summer, potentially hitting an average of $5.35 for regular on Long Island, experts said, but some tax relief at fuel pumps is now in effect.

The state’s sales tax on motor fuels has been partially suspended, with 16 cents off each gallon of gas or diesel, under a "tax holiday" that started Wednesday as part of efforts to offset high prices. Also taking effect Wednesday were Nassau and Suffolk counties’ partial caps on fuel taxes, with the first $3 per gallon of gas being taxed at the 4.25% county sales tax rate, while the remaining amount will not be taxed.

The county legislation will save the average consumer about 9 cents per gallon, based on a gallon of regular gas being priced at about $5, Christopher Boyle, spokesman for Nassau County, said in May.

The average price of a gallon of regular gas on Long Island on Wednesday was $4.957, up 62.2% from a year ago when it was $3.057, according to AAA.

“Fuel prices have surged in recent months, hurting working families and small businesses the most,” New York Gov. Kathy Hochul said in a statement Wednesday. She said the suspension of 16 cents off the 33.35-cents-per-gallon state tax “is providing some $609 million in direct relief to New Yorkers.” 

In April, Hochul signed the fuel sales tax relief as part of the state's fiscal year 2023 budget.  The measure runs from June through December.

Counties cap taxes

The State Legislature gave counties the option of capping county sales taxes on fuel at $2, $3 or $4 per gallon. Twenty-four of the state's 62 counties enacted partial gas caps that went into effect Wednesday and will expire between September and March, said Jason Gough, spokesman for economic development in the governor's office. (Seneca County already had a gas tax cap.)

Nassau County’s tax cap will expire Dec. 31, while Suffolk County’s will expire Dec. 1.

Nassau County Executive Bruce Blakeman on Wednesday said it might take a few days for the savings to hit drivers but he estimates gas will cost about 25 cents per gallon less.

Suffolk County Presiding Officer Kevin McCaffrey (R-Lindenhurst) said in a statement, the tax relief “will definitely make a difference for families struggling to make ends meet as they face rising costs and runaway inflation.”

The price changes could be seen at some local gas stations Wednesday.

Grocer Stop & Shop, which has 50 supermarkets on Long Island, has four gas stations in New York state, including one in Farmingville.

“Gas tax rollbacks took effect at our four New York fuel stations prior to their opening this morning,” said Stefanie Shuman, spokeswoman for the Quincy, Massachusetts-based grocer.

Rockville Centre resident Katie Fina paid $5.11 a gallon for premium  Wednesday at a Speedway station in Rockville Centre — nearly $68 to fill the tank of her Acura TLX from close to empty. In addition to the tax rollback, she said she received a 3-cent discount through Speedway’s rewards program.

“I hope it continues because it is down a lot from what I was paying,” Fina said. She recalled paying as much as $5.99 a gallon for premium gas recently.

Harold Monje, 36, of Inwood, said he has tried to find ways to save on gas, using the GasBuddy app to search for low prices and trying to take the train instead of driving on weekends.

“The price at this gas station is very low," he said as he filled up at the Rockville Centre Speedway, where regular was $4.64. "The price at other gas stations is almost $5. This is the lowest one I’ve seen today,” Monje said.

Higher prices likely

Gas prices have hit record highs recently as a growing number of countries and refineries stopped buying Russian oil because of the country’s Feb. 24 invasion of Ukraine. 

Russia was the third-largest producer of oil and other petroleum liquids in the world in 2021, according to the U.S. Energy Information Administration. The country produced 10.78 million barrels a day last year, and that accounted for 11% of the world's total, according to the agency.

Two factors likely will push gas prices even higher this summer, said Chris Lafakis, director of energy and climate economics at Moody’s Analytics in West Chester, Pennsylvania.

For one thing, the European Union announced on Monday that it would phase out Russian oil imports. That action “has pushed up oil prices and it has the potential to lift them even higher,” Lafakis said.

Another factor: Gas stations in New York and other states are required to switch from winter blends to special summer blends of fuel, which have lower vapor pressure  and are more expensive because they are harder to refine, Lafakis said.

The national average price of a gallon of regular gas Wednesday hit a record high, $4.671, up 53.4% from a year ago, according to AAA.

There is a good chance the national average will top $5 this summer, Lafakis said. Long Island’s average typically runs 25 cents to 35 cents higher than the national average, he said.

With Candice Ferrette and Jonathan LaMantia

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.