Georgia gas tax suspension lapses, meaning prices will rise at the pump

The price to fill up your car at the pump will go up after the state’s suspension of motor fuel taxes lapsed.

Gov. Brian Kemp had signed a series of emergency orders to suspend the state’s gas tax, a move that has kept sometimes-spiking fuel prices lower in Georgia than in nearly any other state over much of the past two years.

But Kemp let the latest order lapse Wednesday. The expiration means the state will resume collecting 31.2 cents a gallon for unleaded gasoline and 35 cents per gallon for diesel.

Drivers shouldn’t feel an immediate impact since the fuel now at service stations wasn’t taxed during the suspension. However, prices will gradually rise as gas that is taxed hits the market.

The governor’s state of emergency allowed him to waive the tax collections as long as legislators approve the decision when they next meet. Since lawmakers have now convened for a court-ordered redistricting session, they must ratify the suspension.

But Kemp doesn’t plan to ask for an extension while the General Assembly is in special session. Administration officials say the governor is in a wait-and-see mode as prices remain below $3 per gallon in much of Georgia.

The gas tax suspension was a useful political tool as Kemp ran for reelection in 2022, a time when prices nationally eclipsed $4 per gallon.

Under state law, the governor had to extend it, or let the suspension expire, every month. The state decided to forgo the levy for 10 months, from March 2022 to this past January, and Kemp benefited from free monthly media coverage each time he extended the break.

He lifted the suspension in January as prices fell below $3 per gallon, then resurrected it in September with an emergency order that blamed President Joe Biden’s administration for rising costs.

Analysts attributed the higher gas prices to rising demand and supply cuts of a global commodity. And U.S. oil production is expected to set a record this year, despite Republican complaints that the Biden administration has stifled growth in the industry.

Georgia’s gas tax suspension cost the state — and saved drivers — $150 million to $190 million a month. Kemp said Georgians saved $1.7 billion during the previous 10-month break.

The state’s been able to handle the loss of money financially because it is sitting on huge financial reserves due to three consecutive years of massive revenue surpluses. The Atlanta Journal-Constitution reported in October that Georgia has a record $16 billion in its rainy day and “undesignated” reserve funds.

At $2.79 per gallon of unleaded regular gasoline on Thursday, Georgia had the fourth-lowest average price in the nation, according to AAA. That’s 45 cents below the national average.