A station in the Toledo, Ohio, area displays sub-$2 gas prices on Tuesday.
By Jon Schmitz / Pittsburgh Post-Gazette
For Pennsylvanians traveling in Ohio these days, there is this must-visit attraction: the gas station.
The average price of a gallon of unleaded regular gasoline in the Buckeye State stood at $2.01 on Tuesday, 57 cents lower than the average price in Pennsylvania and 59 cents below the average for Pittsburgh, according to AAA’s Fuel Gauge report.
Numerous stations in Ohio were selling it for less than $2, including one station in Toledo at $1.65, according to GasBuddy.com.
The disparity is likely to grow this week as Pennsylvania’s tax on gasoline wholesalers rises by 9.8 cents per gallon, effective Thursday. Ohio’s tax already is 13.8 cents lower than Pennsylvania’s, and that difference will grow to 23.6 cents.
But experts say a bigger factor in the gas price differential is this: location, location, location.
The benchmark for Ohio’s gas prices is set in the Chicago markets, and Pittsburgh and Pennsylvania prices are governed by the New York Harbor benchmark, said Patrick DeHaan, senior petroleum analyst for GasBuddy.com.
The before-taxes benchmark in New York was $1.45 per gallon on Tuesday morning, and the price in Chicago was $1.15, he said.
“The Chicago markets have access to far cheaper Canadian crude oil,” Mr. DeHaan said, and much of what passes through New York is imported from Russia and the Middle East. The per-barrel price of crude oil in Chicago markets was $38 on Tuesday; in New York it was $60.
Although train shipments of crude oil from North Dakota and Canada to the East Coast have increased, “the vast majority of the oil is still that more-expensive imported crude oil,” he said.
“You guys are at the end of a pipeline that originates in the Philadelphia-New York Harbor area,” said T. Mason Hamilton, petroleum markets analyst for the U.S. Energy Information Administration. “Ohio is getting a lot of material from the west.”
Chelsea Pompeani, director of public affairs for AAA East Central, said taxation is the second-biggest factor in the price difference.
Pennsylvania’s Act 89, the transportation funding measure enacted last year, raised the gasoline tax by 9.5 cents per gallon on Jan. 1 and will add an additional 9.8 cents on Thursday, bringing the state levy to 51.6 cents per gallon. Ohio’s tax is 28 cents per gallon.
Because the Pennsylvania tax is assessed at the wholesale level, there is no way of knowing the precise impact on prices, she said. But prices rose in January after the first tax increase.
Since then, the average price of unleaded regular has fallen from about $3.50 to the current level of $2.58 in Pennsylvania, creating a best-of-both-worlds situation where drivers are paying less while the state gets more money to repair roads and bridges and operate transit systems.
“Fuel prices have moderated, so people are paying less than they did last year, but at the same time we have a steady revenue stream that is paying huge dividends for Pennsylvanians,” said Erin Waters-Trasatt, spokeswoman for the Pennsylvania Department of Transportation.
Whether falling prices will continue to mask the impact of higher taxes remains to be seen, but the Energy Information Administration has projected that U.S. average prices will continue to drop through May.
A seasonal factor that also pumps up prices here is the requirement that stations in the seven-county Pittsburgh metro area use a less-polluting reformulated gas from May 1 to Sept. 15. It is estimated to cost 10 to 15 cents per gallon more than conventional gasoline.
Gov. Tom Corbett signed legislation in May, sponsored by state Sen. Elder Vogel Jr., R-New Sewickley, to eliminate the “summer gas” requirement, but the final decision rests with the U.S. Environmental Protection Agency.
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