Last Updated: 10:11 a.m.
Regular unleaded gas prices fell to near $3 a gallon in places even in the wake of Hurricane Ian, reaching the lowest levels since January. But the drop is the result of a one-month suspension of the 25.3-cent state gas tax, timed by the Republican-dominated Legislature to coincide with the final month ahead of the 2022 mid-term election. The tax break will result in a small shock on Nov. 1, when prices rise again by that amount.
The suspension of the tax brought average prices across Florida down to $3.26 a gallon on Sunday. But gas prices were declining anyway, and have declined an additional 13 cents a gallon on average, across the state, in addition to the implementation of the tax exemption.
In Palm Coast’s Guzzler’s Alley along State Road 100, for example, prices ranged from $3.13 to $3.39. The Hess station south of Korona, often the station with the lowest gas prices, was at $3.23. Several stations were selling gas for $3.08 a gallon along State Road 40 and I-95 in Ormond Beach. Buc-ees at LPGA Boulevard was selling at $3.25, and Sam’s Club nearby at $3.13, according to prices posted by Gas Buddy Tuesday morning.
“This gas tax builds on the previous downward pressure on pump prices, stemming from global recession concerns and underwhelming fuel demand,” said AAA spokesman Mark Jenkins. “Prices are now beginning to dip below $3 a gallon at various gas stations in the state. While everyone might not be so lucky to see sub-$3 gasoline, all Floridians should expect a sizeable discount this week.”
As commenters note below, the lowering of prices has also been compounded by the largest extended withdrawals of oil from the country’s Strategic Petroleum Reserve in history: “Since Russia’s invasion of Ukraine, President Biden has overseen the largest sale of oil from the Strategic Petroleum Reserve ever, to ease prices at the gasoline pump,” The New York Times reported in late September. “Having released 160 million barrels of crude since March, more than a quarter of the stockpile, the Energy Department has reduced the reserve to its lowest level in four decades. Some oil experts say continuing the withdrawals could test the nation’s energy security.”
Crude oil prices plummeted to $77 a barrel in late September, their lowest level since a December low of $66, but have been edging up since. Today, oil was trading at around $85 a barrel, with gas prices rising across the country to a national average of $3.80, though that average is disproportionately affected by increases in the west of the country: gas in parts of California was selling for more than $6 a gallon due to refineries breaking down.
The Florida Motor Fuel Tax Relief Act of 2022 was part of a larger bill that passed the House and Senate on March 14, 2022. That month, the national gas price average for regular unleaded ended at $4.32 a gallon, on its way to reaching $5 a gallon in June before starting a steady decline. The cut applies to all gasoline products.
But it does not eliminate local-option gas taxes. In Flagler County, for example, the previous state and local tax added $0.34425 to the price of a gallon of gas. In October, it will add $0.09125. The federal tax is an additional 18 cents per gallon. President Biden in late spring was calling for a three-month suspension of the federal gas tax. Legislation was introduced in the House at the end of May to suspend the federal gas tax through December. The bill has not gone anywhere.
In Florida, House Bill 7071 included several temporary tax cuts and some permanent cuts, such as the reduction from 6 to 3 percent in the sales tax on mobile homes and the strange exemption from the sales tax on tickets to Formula One and Daytona 500 races. That exemption also applies to soccer’s World Cup matches, ahead of the 2026 World Cup, which will be hosted by the United States and Mexico. It may have a few matches in Florida.
The bill included tax “holidays,’ such as the 14-day elimination of the sales tax on school supplies, a 14-day exemption on disaster-preparedness items, and two seven-day exemptions on tools and vacation items. The combined tax exemptions diminish revenue by $804 million, including $72 million for local governments. The total tax-cut package, however, including permanent cuts, adds up to a $1.11 billion reduction in revenue. (See a full analysis of the bill here.)