Connecticut’s diesel fuel tax will climb by 1 penny per gallon starting July 1, due to a formula-based system enacted by the state legislature in 2007. The formula, which is applied and reset each July 1, is based on the average wholesale price of diesel fuel in Connecticut, multiplied by 8.81%, and then added to a flat amount of 29 cents per gallon.

Diesel Tax Formula

The Department of Revenue Services recently announced that the diesel rate will climb from 48.9 cents per gallon to 49.9 cents, based on the formula. This increase comes on the heels of a massive upswing in the market rate, with the average national retail price of diesel increasing by over 40% since February.

Connecticut tends to track higher than the national average, with the state price of diesel standing at $5.55 per gallon, according to AAA. The diesel tax formula has produced some sharp increases in recent years, including a 9-cent per gallon jump in July 2022 and a potential 12-cent per gallon jump in July 2023, which was suspended by Gov. Ned Lamont and the legislature.

Industry Concerns

Some industry experts fear that another tax increase could be coming next year, if the Persian Gulf conflict continues to hold oil prices elevated. The Connecticut Energy Marketers Association has pushed for the state to replace the formula-based diesel tax with a flat, per-gallon charge. John Blair, president of the Motor Transport Association of Connecticut, noted that increased fuel costs usually find their way to customers, as groceries and most department store goods are delivered by diesel-powered trucks.

Original reporting: The Connecticut Mirror — read the source article.