Cap on Suffolk gasoline tax ends but prices still dropping

A partial fuel tax cap in Suffolk County is ending but drivers are still seeing the benefit of declining gasoline prices and a state “tax holiday” that will last another month.

The immediate impact on residents from Suffolk’s tax break expiringTuesday will be minimal, costing drivers an additional 2.7 cents per gallon at the current average.

Robert Sinclair, senior manager of public affairs for AAA in New York and New Jersey, said drivers won’t feel the pinch from the end of Suffolk’s fuel tax cap "as long as gas prices continue to drop."

“But then prices start going back up, and they eventually will,” Sinclair said.

Under Suffolk’s cap, the first $3 per gallon of gas was taxed at the 4.25% county sales tax rate, while the remaining amount was not taxed. An identical cap remains in place in Nassau County through Dec. 31.

The tax caps were instituted this past spring as part of efforts to offset high gas prices. While the cost to fill your tank remains elevated — up 10 cents per gallon from a year ago — gas prices have declined considerably since the tax caps went into effect. On June 1, the average price of a gallon of regular gas on Long Island was $4.957, up 62.2% from a year earlier.

The current average gas price on Long Island is $3.64 for regular and $4.50 for premium, down 2 cents from a day earlier and 8 cents in the past week, according to data from AAA, which tracks gas prices across the United States.

The continued decline in gas prices isn’t just being felt on Long Island this week. The national average gas price has dropped 7 cents to $3.47 per gallon since Thanksgiving, according to AAA. Sinclair said he has seen reports from AAA motor clubs in other parts of the country projecting that gas prices could drop below $3 per gallon by Christmas, though he remains skeptical of such bold predictions.

Sinclair cited COVID-19 lockdown restrictions in China as a primary reason for the recent drop in prices. He said a Dec. 5 European Union ban on Russian crude oil could have a negative effect on the market.

“There’s just too much uncertainty in the market,” Sinclair said. “There’s so many factors that play into the price of crude oil and the price of gasoline and they’re global in scope.”

The state’s motor fuels tax took 16 cents (8 cents of excise tax and 8 cents of sales tax) off the 33.35 cents of state fuel tax per gallon. There is an additional three-fourths of a cent of state sales tax suspension in the Metropolitan Commuter Transportation District, which covers New York City, Long Island and five other counties in the metro area. Both the state's and the transportation district's tax breaks run through Dec. 31.

Suffolk and Nassau were among 24 counties across the state to add an additional tax cap.

By Grant Parpan

grant.parpan@newsday.com@GrantParpan

Grant Parpan covers Suffolk County courts and federal courts for Newsday. A Long Island native, he joined Newsday in 2022.