NCPA - National Center for Policy Analysis

Taxes Included In Gasoline Prices

April 7, 1999

As of April 5, 1999, the U.S. nationwide average price of unleaded regular gasoline was $1.12 a gallon, up 21 cents since prices bottomed out six weeks ago, according to a Department of Energy survey. Previous estimates, based on an average cost for all grades of gasoline of $1.33 a gallon show that over half of what consumers pay goes to the government in taxes rather than for the gas.

  • The federal government adds an excise tax of 18.3 cents on every gallon of gas.
  • Each state then adds an additional excise tax now averaging 19.4 cents per gallon.
  • This adds up to a total of 37.7 cents per gallon.

These taxes accounted for about 28 percent of what consumers paid for a gallon of gas at the pump, using the $1.33 figure. For regular unleaded at current prices, excise taxes are about 34 percent.

For a car with a standard 15 gallon gas tank, a tax of 37.7 cents per gallon adds up to $5.66 per fill-up. The Tax Foundation estimates that the average American household spends about $422 a year on these taxes alone.

But that is not all, says Americans for Tax Reform. The government imposes 43 different direct and indirect taxes on the production and distribution of gas, for a total tax burden equal to 54 percent of the price of a $1.33 gallon of gas.

Source: "The Tax Bite on Everyday Products...Gas," Tax Bites, Americans for Tax Reform Foundation (website, undated) and Energy Information Administration.


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