Middle Eastern turmoil causes spike in gas prices; spike in gas tax for state?

[March 08, 2011]  SPRINGFIELD -- Illinois workers had to start paying more out of their pockets as a result of the state's 67 percent income tax hike in January. Now, Illinois drivers are paying more out of their pockets at the gas pump.

Political turmoil in the Middle East has created higher prices at gas pumps across the nation. But while drivers pay more at the gas pump, the state will pocket the money from the state's gas sales tax, said Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association.

"Usually when prices get up in this range, in between $3.50 to $4 a gallon, I think you either see a flatness of volume or actually volume going down," he said. "And on the sales tax side of things, the government will see an increase."

According to the Illinois Department of Revenue, the statewide tax on gasoline or gasohol is 19 cents per gallon, and 21.5 cents per gallon on diesel fuel.

Revenue spokeswoman Sue Hofer did not have an estimate for the amount the state has collected in gas sales tax since the prices started climbing in late February. She said drivers will need to be more flexible.

"How flexible is someone's budget, and how flexible are their driving habits?" Hofer asked.

According to AAA's Daily Fuel Gauge Report, Illinois consumers are paying an average of $3.62 for a gallon of regular gasoline, up about 83 cents from a year ago. Statewide, consumers paid an average of $3.27 for regular gas a month ago, according to the report.

When gas prices are high, people are more conservative with their finances, Fleischli said.

"It stifles your spendable income you have," he said. "They'll go into our stores and still buy the things they need -- milk and those kinds of things. But they won't buy the soda pop and candy, things that are impulse buying. That seems to take a hit when prices get higher than usual."

While regular drivers can absorb the cost of higher gas prices by driving less and carpooling more, truckers who drive for a living may get hit with the cost at the pump, according to Don Schaefer. He is executive vice president of the Midwest Truckers Association, which represents 3,000 Midwest trucking companies.

"Unfortunately, in the trucking industry, in all transportation industries, it's driven by the fact that you have to have goods and services moved from Point A to Point B on a timely schedule," he said. "The consumer demands it, the shipper demands it, and there is really no option. You've got to make the delivery."

According to AAA, a gallon of diesel fuel in Illinois is costing on average $3.86 a gallon, up 90 cents from a year ago and up 32 cents from a month ago.

[Illinois Statehouse News; By DIANE S.W. LEE]