Illinois' gas tax compounding impacts of high fuel prices on logistics industry

[May 13, 2022] By Andrew Hensel | The Center Square

(The Center Square) – As fuel prices continue to rise across the country, Illinoisans are seeing even higher prices due to the state's high gas taxes. That's hurting the state's trucking industry.

Illinois' fuel prices are at their highest mark ever with gas prices averaging $4.82 per gallon throughout the state. Diesel fuel is currently at its all-time high of $5.28 per gallon, according to AAA.

While Illinois does not have the highest prices in the nation, the state's high motor fuel tax has added an extra burden to the already inflated fuel prices. Illinois' gas tax is at 39.2 cents per gallon since doubling in 2019 with automatic annual increases pegged to inflation. Illinois also adds its sales tax on top of gas taxes.

Don Schaefer, vice president of Mid-West Truckers Association, said the high cost of diesel is affecting the cost of moving products in and out of Illinois.

"The supply chain is totally dependent on good modes of transportation," Schaefer said. "It costs money to fuel up all the jets, the trucks, the trains, the boats, and now people are going to say, 'I see where inflation comes from.'"
 

Schaefer said prices all around are going up as a result.

"If you look at the big picture, it's a whole supply chain issue," Schaefer said. "The whole supply chain has been affected now for the last year and a half, which has led to the market increase in prices on not just food but any products you buy."

Illinois' high diesel prices combined with the nation's third-highest state motor fuel tax has trucking companies and distributors having a hard time keeping up with costs.

"It costs about a dollar a mile just in diesel fuel alone, that doesn't include the cost of paying the driver or the benefits that go with it," Schaefer said. "So just to pay for the fuel in that truck, it's a dollar a mile."

Prices have only continued to skyrocket across the nation as well as in Illinois. Schaefer worries they will get worse before they get better.

"There is probably nothing that is going to help the situation and obviously as we are looking now, forecasts suggest the prices are going to continue to go up," Schaefer said. "This is a little tough right now."

Andrew Hensel has years of experience as a reporter and pre-game host for the Joliet Slammers, and as a producer for the Windy City Bulls. A graduate of Iowa Wesleyan University and Illinois Media School, Andrew lives in the south suburbs of Chicago.