OGDEN, Utah -- Lawmakers in Utah are expected to debate an obscure state law that since 1981 has prohibited gasoline retailers from setting pump prices below cost, reported the Associated Press.
John Hill, director of the Utah Petroleum Marketers & Retailers Association, is pushing a bill to extend the Utah Motor Fuel Marketing Act's sunset for another five years.
The bill was given a favorable recommendation by a legislative committee last month. It is expected to be voted on in the legislative session that begins in [image-nocss] January. The same committee recommended a five-year sunset extension last year, but lawmakers approved only one year.
The law was designed to protect local retailers from being priced out by national chains.
Without legislative action, that law will expire in July.
Meanwhile, West Virginia motorists should find out by Friday whether the state will increase one of its fuel taxes in January. Governor Joe Manchin said he does not expect to repeat his 2005 decision that froze the increase slated for this year. Hurricane Katrina and its aftermath had helped skew the wholesale price of gasoline, which determines the rate of this tax. "We had an artificial spike last year," he said. "We don't have such an emergency situation this time. I just assume we will let it go forward."
Manchin capped the 2006 rate at the previous year's level to address already high fuel prices. The rate freeze saved motorists an estimated $53 million, but at the expense of the beleaguered State Road Fund. Lawmakers learned earlier this month that the fund needs an additional $350 million a year to cover needed highway construction and maintenance projects.
Besides the tax derived from wholesale prices, West Virginia levies a per-gallon excise fuel tax of 20.5 cents. These two taxes provide about 30% of the State Road Fund's revenue. Motorists who buy fuel in West Virginia pay a total of 45.4 cents per gallon in state and federal taxes.
By December 1, state officials must calculate how the wholesale price of gasoline averaged between July 1 and October 31. The tax equals 5% of that average. Any rate change would take effect January 1.
The rate would have increased this year from 6.5 cents to 10.3 cents per gallon, until Manchin's executive order, after the hurricane-influenced wholesale per-gallon price jumped from $1.30 to $2.01, a 54% increase.
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